Nevada wins court approval to enforce gaming laws on Kalshi

Ninth Circuit rules unanimously that Nevada can enforce gaming laws on Kalshi

The oral argument was held on April 16, and anyone watching that day came away with a reasonably clear sense of where the panel was headed. The Ninth Circuit had already denied Kalshi's stay request in February, which meant the court had looked at the underlying merits once and declined to protect the company while it waited for a full ruling. Thursday's 3-0 decision in KalshiEX, LLC v. Assad was not a surprise in direction. It was a surprise in its completeness.

The core of Kalshi's case was federal preemption. The company holds a designated contract market license from the Commodity Futures Trading Commission, and the Commodity Exchange Act gives the CFTC exclusive jurisdiction over futures and event contracts. Kalshi's argument followed from there: if the federal framework governs, state gaming regulators have no authority to touch it. The Ninth Circuit found that argument insufficient. The CEA's preemption clause, the panel concluded, does not extend far enough to displace Nevada's gaming laws when the product in question is a sports event contract.

What makes the ruling structurally significant is the treatment of election contracts. Those were not resolved — the panel remanded the question back to the district court. That bifurcation matters. The court drew a line between sports and elections, which suggests the preemption analysis is product-specific rather than company-specific. Kalshi's federal registration does not function as a blanket shield.

The consensus view in coverage I've read frames this as a setback Kalshi can work around — en banc petition, Supreme Court review, a long appellate road. That framing is too comfortable. A unanimous panel with no dissent is a poor foundation for an en banc petition. The standard for rehearing en banc requires showing the panel decision conflicts with existing circuit precedent or presents a question of exceptional importance. Kalshi will argue the latter, and the Supreme Court's agreement to review circuit splits on prediction markets gives that argument some traction. But the company is now operating sports event contracts in Nevada without injunctive protection, which means the daily fines that a Nevada judge was already weighing become collectible judgments rather than contested threats.

I weight my own bias here. I tend to find the structural rupture in these situations before the rebound case. It is possible Kalshi's Supreme Court path moves faster than the state enforcement machinery. The White House has shown it is willing to apply political pressure to this fight, and that is not nothing. But political pressure does not dissolve a 3-0 circuit ruling, and it does not pay Nevada's daily fines.

The split this ruling deepens — between circuits, between product categories, between federal licensing and state enforcement — is exactly the kind of unresolved tension that the Supreme Court agreed to hear. The Ninth Circuit has now handed the justices a unanimous opinion to weigh against whatever other circuits have produced. That is the record the high court will read. Kalshi's best outcome is that the Supreme Court moves before the state enforcement calendar does.