Kalshi petitions for en banc rehearing in Nevada sports prediction markets case

Prediction market platform Kalshi has petitioned for an en banc rehearing of a 9th Circuit Court of Appeals decision that held Nevada gaming regulators could classify its sports contracts as gambling. The company argues the ruling creates a circuit split and conflicts with federal law, specifically the Commodity Exchange Act (CEA).

Kalshi stated that the rehearing is necessary because the panel's decision contains internally inconsistent reasoning that conflicts with the plain text of the CEA. The platform also contends that the 9th Circuit's ruling is contradictory, as it acknowledged the CFTC's exclusive jurisdiction over instruments traded on derivative exchanges while simultaneously allowing states to regulate sports contracts approved by the CFTC for trading on those exchanges. "As a result, Kalshi now stands exposed to civil and criminal liability, even though it is abiding by federal law and the mandate of its exclusive federal regulator," the petition read.

Separately, brokerage platform Robinhood has filed a certiorari petition with the U.S. Supreme Court, seeking review of the same 9th Circuit decision. This follows New Jersey's earlier certiorari petition on the issue of state jurisdiction over sports prediction markets. The 3rd U.S. Circuit Court of Appeals had previously ruled in favor of Kalshi, asserting that the CFTC has exclusive jurisdiction because sports prediction markets are considered swaps, creating the circuit split cited by Kalshi.

Legal expert Daniel Wallach suggested that Kalshi and Robinhood's filings represent a coordinated strategy, with Kalshi seeking to deter state enforcement actions in the 9th Circuit while Robinhood pushes for expedited Supreme Court review and consolidation with New Jersey's petition.