American Gaming Association supports Nevada court ruling in Kalshi case

Dani Lever had a statement ready before the Ninth Circuit finished publishing its opinion. That tells you something about how Kalshi reads its own position.

The statement was technically accurate. The three-judge panel in San Francisco did agree with the Third Circuit on one point: federal law prevents states from regulating trading on a federally licensed exchange. Lever led with that. What the statement did not say is that the Ninth Circuit stopped there, declined to extend the logic further, and concluded that the Commodity Exchange Act likely does not pre-empt Nevada gaming regulations as applied specifically to sports event contracts. The panel was unanimous. The district court had not abused its discretion when it dissolved Kalshi's preliminary injunction. That is the holding.

Nevada Gaming Control Board Chairman Mike Dreitzer called it complete vindication. American Gaming Association president Bill Miller called it a significant win for consumer protections and taxpayers. Neither is wrong. What the Ninth Circuit produced is something more damaging to Kalshi than a loss on the merits would have been: it produced a circuit split on a question the company cannot afford to leave unresolved.

The Third Circuit ruled the opposite way in April. A two-judge majority found Kalshi's sports-event contracts are financial swaps and futures, making CFTC oversight exclusive and state gaming laws inapplicable. Judge Jane Richards dissented in that case, arguing the contracts were functionally indistinguishable from sports betting. The Ninth Circuit, unanimous, has now adopted the reasoning the Third Circuit dissent reached. Two federal appeals courts, same legal question, opposite answers.

Kalshi's spokeswoman confirmed the company will seek further review. Further review, at this point, means the Supreme Court. That is where the circuit split gets resolved, and Kalshi's stated confidence in the CFTC's regulatory posture — that the agency is working to clarify its rules — becomes the secondary argument rather than the exit. You cannot wait for an agency clarification to moot a circuit split. The Court does not work on that timeline.

I have seen this structure before in regulatory enforcement litigation. A company wins one circuit, loses another, and treats the split as evidence the question is genuinely open. That framing serves the company's investors and its counsel. The practical consequence is that operations remain legally uncertain in every jurisdiction where a state has not yet filed, not just the ones where courts have ruled. Connecticut's attorney general filed suit this week over the same category of contracts. Montana's court declined to block state enforcement. The map is closing faster than the legal strategy assumes.

The AGA's endorsement of Nevada's position is the institutional signal worth watching. The gaming industry's trade body has standing, resources, and incentive to file in any Supreme Court proceeding. Kalshi will argue federal preemption. The AGA will argue state sovereignty and consumer protection. The CFTC's current posture — sympathetic to Kalshi's reading of its own rules — introduces a third voice whose weight the Court will have to calibrate against two circuit opinions pointing in different directions.

What the Ninth Circuit's unanimous vote establishes, more than the legal outcome, is the durability of Nevada's position. Three judges, no dissent, applied to sports event contracts specifically. Dreitzer said Nevada would continue to enforce state law. The daily fines Nevada has already imposed are now on firmer ground than they were Thursday.