Nevada can ban the prediction market platform Kalshi from operating in the state, the 9th U.S. Circuit Court of Appeals ruled Friday.
In March 2025, the Nevada Gaming Control Board sent a cease-and-desist letter to Kalshi, arguing that the company operated a sports betting platform in the state, in violation of Nevada gaming regulations.
Kalshi disagreed, characterizing itself as a “designated contract market” (DCM) that offers legal sports event contracts, or “swaps.” Nonetheless, its own marketing copy advertised Kalshi as “the first app for legal sports betting in all 50 states,” according to the ruling.
“The substance of the sports event contracts offered on Kalshi’s DCM is sports gambling, regardless of whether Kalshi calls them swaps,” Judge Ryan D. Nelson wrote in the opinion.
The judges’ unanimous 3-0 decision spells trouble for Kalshi and other prediction market companies that allow people to effectively gamble on sports.
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“This completely vindicates what we have been saying all along,” Mike Dreitzer, Nevada Gaming Control Board Chairman, said in a statement. “This is sports betting and needs to be properly regulated by the state.”
Kalshi spokeswoman Dani Lever said the company will seek further review, according to the Nevada Independent.
At the heart of the matter is whether, as Kalshi argued, the Commodity Exchange Act, a federal law that regulates the trading of commodity futures, preempts state gaming regulations as they apply to swaps.
The 9th U.S. Circuit Court of Appeals concluded the CEA didn’t preempt state regulation. Still, a separate earlier decision from Philadelphia’s Third Circuit backed Kalshi’s position.
Zach Fulton, a spokesman for the Commodity Futures Trading Commission, the federal regulatory agency for the industry, told the New York Times that the 9th U.S. Circuit Court of Appeals “erred” in its decision.
“The Ninth Circuit has now teed up a circuit split that calls out for resolution by the Supreme Court,” he said.
