The Ninth Circuit Court of Appeals ruled in Nevada’s dispute with Kalshi that the Commodity Exchange Act does not prevent states from regulating sports contracts. The ruling could lead to a Supreme Court case, according to the report.
The decision affects how states may regulate sports-related prediction contracts.
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The US Court of Appeals for the Ninth Circuit denied Kalshi’s requests for panel rehearing and rehearing en banc in its Nevada case, leaving the ruling dissolving the preliminary injunction against Nevada gaming regulators in place. Kalshi has 90 days to petition the US Supreme Court; the sports-event contract ban remains in effect in Nevada, and the company says the ruling exposes it to civil and criminal liability.
On Wednesday, the Ninth Circuit turned down Kalshi's request to have the case reconsidered by the panel or by the full court. No judge asked for a full-court vote. The panel was unanimous in declining to rehear the matter, per the decision.
It was reported that 44 state attorneys general wrote to the CFTC opposing its asserted authority over sports event contracts. Their letter responds to the agency’s proposed rule.
Donald Trump expressed support for US leadership in prediction markets during White House remarks on 19 August. State gambling regulators argue that sports contracts constitute betting requiring state licences, while platforms operate under CFTC oversight. The report cited Kennedy Forum estimates that sports account for 75%–90% of Kalshi’s trading volume and roughly half of Polymarket’s activity.
It was reported that the Ninth Circuit ruled in favour of tribal gaming interests a day after the Senate failed to advance the CLARITY Act. The outlet said the prediction market dispute remains unresolved at the CFTC.
Two California Tribes, Blue Lake Rancheria and Chicken Ranch Rancheria, persuaded the Ninth Circuit that their IGRA claim against Kalshi is likely to prevail, and the appellate court reversed the district court on the central legal questions. That outcome arrived one day after the Senate declined to move the Digital Asset Market Clarity Act (CLARITY Act) forward. The dispute now goes back before the district court in the Blue Lake matter, while the larger question of the Commodity Futures Trading Commission's (CFTC) authority remains open.
The Ninth Circuit ruled against Kalshi over sports event contracts in Nevada. The court returned a separate question concerning election contracts to the district court, leaving the federal pre-emption issue unresolved.