A federal appeals court panel on Friday affirmed Nevada’s long‑standing power to regulate gambling, refusing to let prediction‑market operator Kalshi resume trading on sports and election contracts in the state. The 9th U.S. Circuit Court of Appeals in San Francisco ruled that Kalshi had not shown a persuasive argument that federal commodities law preempts Nevada’s gambling statutes.
Court says Nevada law likely applies
The judges concluded that federal law probably does not override Nevada’s authority to treat Kalshi’s event contracts as gambling. Nevada, home to the nation’s largest commercial casino market, can therefore continue to enforce its gambling regulations on the platform.
State officials celebrate the decision
Nevada Attorney General Aaron D. Ford called the ruling “a major victory for Nevada and our longstanding authority to regulate gaming in our state.” The attorney general’s office said Kalshi had tried to sidestep state law, but the court made clear that “sports betting does not become something else simply because a company calls it an ‘event contract.’”
Implications for other states
The panel sent the question of Kalshi’s election‑contract trading back to a lower court for further consideration of Nevada’s challenges. Roughly 20 states are currently involved in litigation over prediction markets such as Kalshi, Polymarket and Robinhood. The decision raises the likelihood that the U.S. Supreme Court will eventually resolve whether states can regulate these markets under their gambling laws.
Kalshi’s response
Kalshi said it will seek further review of the decision. In the meantime, trading on sports, entertainment and election contracts remains blocked in Nevada.
Background on the legal fight
Kalshi argues it is not a betting platform but a “designated contract market” overseen by the federal Commodity Futures Trading Commission (CFTC), not the Nevada Gaming Control Board. The CFTC regulates commodities, futures and derivatives such as oil, agricultural products and gold. Nevada’s gaming board, however, issued a cease‑and‑desist letter last year stating that trading on sporting events and election outcomes is unlawful in the state and ordered Kalshi to shut down.
Kalshi sued in federal court and initially obtained a preliminary injunction preventing Nevada from taking action. That injunction was later dissolved, prompting Kalshi’s appeal to the 9th Circuit.
What this means for Nevada residents
For now, Nevadans will not see Kalshi’s prediction‑market contracts on sports, entertainment or political events. The ruling reinforces the state’s ability to protect consumers from unregulated gambling and ensures that any future operation of such platforms must comply with Nevada’s licensing requirements.
Legal experts note that the case could set a precedent for how other states address the growing popularity of prediction markets, especially as they intersect with traditional gambling regulations.
Original reporting: KTBS 3 (Shreveport) — read the source article.
