Nevada has opposed Kalshi's request to delay rehearing in the Ninth Circuit Court of Appeals. The state argues that planned changes to Commodity Futures Trading Commission rules will not affect the court's conclusion that the platform's sports contracts fall under state regulation.
Kalshi asked the court to postpone consideration of the petition until the CFTC publishes a revised version of regulation section 40.11, which the agency has promised to release within two months. Nicole Saharsky of Mayer Brown, representing Nevada, responded that the court was already aware of the agency's plans when it issued its decision. Nevada maintains that the Ninth Circuit found sports contracts are not swaps under the Commodity Exchange Act based on the statute's text and purpose, not on the wording of a single regulatory provision.
In August, the Ninth Circuit ruled that Kalshi cannot block oversight by Nevada gaming regulators. Federal law likely does not preempt state gambling legislation. Other jurisdictions have reached similar conclusions: the Sixth Circuit allowed Ohio and Tennessee to enforce their laws against Kalshi, and in Blue Lake Rancheria v. Kalshi the court found that federal law does not authorise sports betting on tribal lands.
A parallel case is proceeding in Illinois. A federal judge partially granted motions by Kalshi, Coinbase and the CFTC, finding that the state's licensing requirements conflict with federal law. The Illinois Gaming Board considers sports event contracts illegal gambling and has imposed a transaction tax ranging from 1.75% to 3.5%. Final terms of the injunction are due by 29 October.
