Gaming Board Chair Welcomes Court Ruling on Nevada Case

Nevada Gaming Board chair Mike Dreitzer calls Ninth Circuit ruling a vindication

In late August, a three-judge panel of the Ninth Circuit Court of Appeals handed Nevada Gaming Control Board Chairman Mike Dreitzer a line he had been waiting to use. "This completely vindicates what we have been saying all along," he said, after the court ruled unanimously that Nevada can enforce its gambling laws against Kalshi's sports event contracts. The ruling was 3-0. It was also, for Kalshi, the second federal appeals court to weigh in — and the first to go the wrong way.

The Ninth Circuit's core finding was that Kalshi's sports event contracts are not federally regulated swaps under the Commodity Exchange Act, which means the CEA's preemption clause does not block Nevada from applying its gaming statutes. Circuit Judge Ryan Nelson wrote the majority opinion and chose a line from Romeo and Juliet to make his point: a rose by any other name would smell as sweet. Nelson was direct about what Kalshi's framing amounted to. He saw no material difference between a bet on the Las Vegas Raiders to cover a spread at Caesars and a contract on the same outcome at Kalshi. "For Kalshi to deny that its sports event contracts are sports bets under a reasonable person's understanding is disingenuous," he wrote.

This matters because it sits in direct opposition to what the Third Circuit found in April, when a 2-1 majority held that New Jersey could not regulate Kalshi's platform — concluding that the contracts were swaps and that CFTC jurisdiction was exclusive. Two federal circuits, reading the same statute, arrived at opposite conclusions about the same product. That is not an ambiguity the lower courts can resolve. It goes to the Supreme Court, or it festers.

Kalshi's spokeswoman Dani Lever acknowledged the split and said the company would seek further review. She also noted that the Ninth Circuit agreed with the Third on one point: that federal law prevents states from regulating trading on a federally licensed exchange in general terms. Kalshi is holding that thread carefully, because it is the thread that leads to a CFTC rulemaking argument — the company still maintains that the CFTC's existing regulations do not prohibit sports contracts and that the agency is working to clarify them.

The consensus read is that this creates an obvious path to Supreme Court review, probably before the 2027 NFL season becomes the next flashpoint. The American Gaming Association's Bill Miller framed the ruling as a win for consumer protections and state tax revenue — the AGA has estimated states have lost more than a billion dollars in sports betting tax revenue from prediction market activity, though the methodology behind that figure has not been independently tested.

The reporting treats the circuit split as the dominant story. That reading is probably right, but it undersells one detail. CFTC Chair Michael Selig said in March that state efforts to restrict prediction markets amounted to an attempt to "effectively nullify federal law." That framing is now complicated by the Ninth Circuit, which is not a state actor and which just ruled that federal law, properly read, does not do what Selig says it does. The CFTC's jurisdictional argument has a circuit split to explain before it has a Supreme Court to persuade.