A federal appeals court sided with Nevada regulators, ruling that Kalshi’s sports-event contracts qualify as illegal gambling under state law. The unanimous decision from the Ninth Circuit panel rejected Kalshi’s argument that its bets should be treated as regulated financial swaps under federal law. The court upheld a district court order allowing Nevada to block the prediction market’s sports betting operations.
The ruling follows Nevada’s longstanding position that prediction markets offering sports-event contracts must comply with state gaming laws. Governor Joe Lombardo emphasized that the contracts constitute gambling and are subject to Nevada’s regulatory framework. The decision also aligns with the Nevada Gaming Control Board’s stance that federal law does not preempt state authority over such contracts.
The Trump administration has previously sought to ease regulations for prediction markets, but the court’s ruling underscores the limits of federal preemption in this area. Kalshi’s sports betting operations remain blocked in Nevada as the company evaluates next steps.
