Ninth Circuit rejects Kalshi's injunction bid against Nevada gaming regulators
The Ninth Circuit Court of Appeals in San Francisco rejected Kalshi's bid for injunctive relief against Nevada's gaming laws on August 28. A three-judge panel ruled 3-0 that the platform's sports event contracts are likely bets rather than federally regulated swaps. The decision dissolves a preliminary injunction that had shielded Kalshi during litigation. Nevada's attorney general called the ruling a major victory for state gaming authority. The ruling splits with the Third Circuit's pro-Kalshi ruling in New Jersey, and Kalshi is considering an appeal to the Supreme Court.
The Ninth Circuit ruling strips the federal preemption shield Kalshi used to operate nationally. State attorneys general now have appellate cover to treat CFTC-registered platforms as gambling operators. Kalshi must geofence Nevada or absorb licensing requirements its federal designation was meant to bypass. The court's reasoning reaches any platform offering sports-linked contracts.
Polymarket and Novig face identical exposure. Connecticut and Kentucky have already filed parallel suits. Each new state filing shrinks the territory where federal registration alone protects contract validity. Traders hold positions whose legality shifts with geography. A second circuit loss would trigger more copycat actions and fragment the national sports market before any Supreme Court review.