Ninth Circuit

Kalshi Says It's a Prediction Market. The 9th Circuit Says It's Gambling.

Prediction markets can no longer offer sports event contracts in Nevada after the appellate court's decision, giving other states a roadmap for regulating the platforms.

Tosin Akintola | 9.1.2026 2:04 PM

Share on FacebookShare on XShare on RedditShare by emailPrint friendly versionCopy page URL Add Reason to Google

Media Contact & Reprint Requests

(Illustration: Fatima Ruiz/Midjourney.)

"Kalshi has a gambling problem," the 9th Circuit Court of Appeals wrote last Friday, when it ruled that the Commodity Exchange Act (CEA) did not preempt Nevada from enforcing its gambling laws against prediction market Kalshi's sports-related event contracts.

Now, thanks to the decision—which affirmed an earlier ruling by a district court— prediction platforms like Kalshi, Crypto.com, and Robinhood will no longer be able to offer sports event contracts in Nevada. The decision could also clear the way for other 9th Circuit states like Arizona—where Kalshi was granted an injunction in May—to enact their own regulations governing prediction markets.

The case turned on whether the sports event contracts offered by Kalshi count as swaps as defined under the CEA, which would exempt them from state gambling laws. Unlike the 3rd Circuit Court of Appeals—which in April granted Kalshi an injunction against New Jersey regulators—the 9th Circuit preferred a narrow textual reading of the CEA.

In the context of a prediction market, a swap means "any agreement, contract, or transaction…that provides for any purchase, sale, payment, or........

© Reason.com