The Ninth Circuit upheld Nevada's ban on Kalshi sports event contracts but sent the question of election markets back to the district court. The ruling creates a circuit split and leaves open whether states can regulate election betting.
A three-judge panel on Friday sided with Nevada on Kalshi's sports contracts, finding that the Commodity Exchange Act does not pre-empt state authority to prohibit such markets. But on election contracts — banned under Nevada law and a small fraction of Kalshi's business — the court returned the case to District Judge Andrew Gordon for further analysis. Judge Ryan Nelson noted that Gordon had not considered whether election contracts fall within the CEA's definition of a swap.
Kalshi has already blocked access to election contracts in Nevada under state order. The district court must now decide whether federal law protects such markets from state-level bans. Under the CEA, swaps include contracts contingent on events with financial or commercial consequences. The appeals court offered no view on whether election contracts meet that definition.
The sports contract ruling conflicts with the Third Circuit, which sided with Kalshi against New Jersey earlier this year.
Election markets face pressure in other states. Washington obtained an injunction blocking Kalshi's election and political contracts. Arizona filed criminal charges, including four counts tied to 2028 election betting and 2026 races. Minnesota banned prediction markets by statute — the CFTC, Kalshi and Polymarket sued, and a federal judge granted the regulator temporary protection. New York is demanding Kalshi obtain a gambling licence for all event contracts, including political ones.
