Ninth Circuit rules Nevada can enforce its gambling law against Kalshi's sports contracts

The U.S. Court of Appeals for the Ninth Circuit ruled unanimously on August 28, 2026, that Nevada's gambling law is not preempted by the federal Commodity Exchange Act as applied to Kalshi's sports-outcome event contracts. The three-judge panel, in KalshiEX, LLC v. Assad, No. 25-7516, affirmed a district court's decision to leave Kalshi without the preliminary injunction that had let it keep taking Nevada customers, holding that Kalshi did not show a likelihood that federal derivatives law strips the state of its authority to enforce Nevada Revised Statutes 463.160, 463.350, 465.086 and 465.092 against sports wagering products. The Nevada Gaming Control Board, which brought the underlying enforcement action, said the ruling affirms its position that Kalshi's contracts are unlicensed sports betting under state law.

How the case got here

Nevada regulators sent Kalshi a cease-and-desist letter in March 2025, arguing the exchange was taking sports bets without a state gaming license. U.S. District Judge Andrew Gordon initially blocked the state with a preliminary injunction in April 2025, then reversed himself that November, dissolving the injunction and rejecting Kalshi's argument that its CFTC registration as a federally regulated exchange shields its markets from state gambling law. Kalshi appealed, was granted a partial stay in January 2026 to keep the case alive pending appeal, and the Ninth Circuit heard argument in April 2026. Friday's opinion affirms Gordon's November 2025 ruling, meaning Nevada can resume enforcing its gaming law against Kalshi's sports contracts unless a higher court intervenes.

A conflicting ruling in New Jersey points this toward the Supreme Court

The Ninth Circuit's holding is the opposite of what the Third Circuit decided four months earlier. In April 2026, a divided Third Circuit panel ruled 2-1 for Kalshi in a New Jersey case, holding that the Commodity Exchange Act does preempt state gambling law as applied to sports event contracts sold on a CFTC-registered exchange. The two rulings now read the same federal statute in opposite directions on the same question: whether a federally registered derivatives exchange can sell a sports-outcome contract without a state gambling license. Kalshi has said it will seek further review of the Ninth Circuit decision. Neither ruling has reached the Supreme Court, and a circuit split this direct is the kind of conflict the Court typically takes up, though we have not seen a filed cert petition as of this writing.

What this does not change

This ruling does not touch any state's regulated online casino or sportsbook status, and it has nothing to do with sweepstakes-style dual-currency platforms. Nevada is licensed for online poker only, not a general iCasino market, and none of the seven live iCasino states, Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia, are affected by this case. What changed is narrower: for now, Nevada can treat Kalshi's sports contracts as unlicensed gambling, while a separate federal appeals court has told the same company the opposite about the same product in New Jersey. A reader in either state should treat Kalshi's legal status there as unsettled, not resolved, while the appeals both sides have signaled they will pursue continue.