Kalshi Loses Ninth Circuit Fight: What the Ruling Means for Prediction Markets and Sports Betting
The Ninth Circuit held that Kalshi had not shown a likelihood that the Commodity Exchange Act preempts Nevada gaming laws as applied to its sports contracts.
Executive Summary
The Ninth Circuit held that Kalshi had not shown a likelihood that the Commodity Exchange Act preempts Nevada gaming laws as applied to its sports contracts.
SAN FRANCISCO, CA, Aug. 29, 2026 — The Ninth Circuit held that Kalshi had not shown a likelihood that the Commodity Exchange Act preempts Nevada gaming laws as applied to its sports event contracts.
In a pivotal appellate ruling addressing the boundary between federal derivatives markets and state-regulated sports wagering, the U.S. Court of Appeals for the Ninth Circuit ruled on August 28, 2026, in KalshiEX, LLC v. Assad, et al. (Ninth Circuit No. 25-7516, D.C. No. 2:25-cv-00575-APG-BNW), that federally registered prediction markets cannot rely on Commodity Futures Trading Commission (CFTC) designated contract market status to automatically block state gaming enforcement.
The Ninth Circuit’s preliminary ruling reinforces that federal CFTC registration cannot be used as an automatic bar against state sports wagering regulation, upholding state police powers over gambling while litigation proceeds on the merits.
No. The court did not declare prediction markets illegal per se. It held that Kalshi had not established that federal commodities law preempts Nevada from applying state gambling regulations to sports-based event contracts at the preliminary injunction stage.
With the preliminary injunction dissolved as to sports contracts, Nevada state regulators can enforce state gaming laws against sports contracts offered to Nevada residents unless further judicial relief is granted.
CFTC event contracts are exchange-traded binary derivatives. State-licensed sports betting involves bookmaking licensed by state gaming commissions. The Ninth Circuit ruled that federal DCM status does not automatically preempt state gaming oversight over athletic contest wagers.
Editorial Review & Attribution: Submitted announcements are reviewed under CryptoCasinoMedia Editorial Standards by Marcus Vance (Senior iGaming Analyst) and attributed directly to original source Kalshi Inc..
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What is the key industry announcement in 'Kalshi Loses Ninth Circuit Fight: What the Ruling Means for Prediction Markets and Sports Betting'?
The Ninth Circuit held that Kalshi had not shown a likelihood that the Commodity Exchange Act preempts Nevada gaming laws as applied to its sports event contracts.
How does this update impact the Crypto Casinos sector?
In a pivotal appellate ruling addressing the boundary between federal derivatives markets and state-regulated sports wagering, the U.S. Court of Appeals for the Ninth Circuit ruled on August 28, 2026, in KalshiEX, LLC v. Assad, et al. (Ninth Circuit No. 25-7516, D.C. No. 2:25-cv-00575-APG-BNW), that federally registered prediction markets cannot rely on Commodity Futures Trading Commission (CFTC) designated contract market status to automatically block state gaming enforcement.
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