Key facts
- A federal appeals court ruled against Kalshi's bid to block Nevada's oversight of its sports prediction markets.
- The 9th U.S. Circuit Court of Appeals found that federal law likely does not preempt Nevada's gaming regulations for these contracts.
- The decision creates a split with a previous ruling by the 3rd U.S. Circuit Court of Appeals regarding New Jersey.
- Nevada regulators argue Kalshi's sports event contracts constitute unlicensed wagering under state law.
- The ruling may lead to Supreme Court intervention on the regulation of prediction markets.
A federal appeals court has ruled that Kalshi cannot prevent Nevada from overseeing its sports prediction markets. In a unanimous 3-0 decision on August 28, 2026, the 9th U.S. Circuit Court of Appeals in San Francisco stated that the federal Commodity Exchange Act likely does not preempt Nevada's gaming regulations as they apply to sports event contracts. This ruling creates a divergence from a previous decision by the 3rd U.S. Circuit Court of Appeals in Philadelphia, which had ruled that New Jersey could not regulate Kalshi's platform. The decision in favor of Nevada increases the possibility that the Supreme Court may weigh in on whether states or the U.S. Commodity Futures Trading Commission (CFTC) should regulate the growing prediction markets industry. Nevada regulators argue that Kalshi's sports event contracts function as wagering and require a state gaming license. Following the appeals court's decision, the Nevada Gaming Control Board filed a civil enforcement action and sought a Temporary Restraining Order against Kalshi.