Kalshi, a prediction-market platform known for offering sports-event contracts nationwide, suffered a significant legal setback when a three-judge panel of the Ninth Circuit unanimously ruled that Nevada’s gambling laws apply to Kalshi, allowing the state to block its sports betting operations. This decision directly challenges Kalshi’s broad interpretation of the Commodity Exchange Act and CFTC regulations, which currently prohibit contracts related to gaming on prediction markets. Since launching sports-event contracts in January 2025, sports-related trading has dominated Kalshi’s platform, constituting nearly 87% of volume in 2025 and still maintaining 72% in 2026.

This ruling advances what many expect to be a Supreme Court confrontation, as it deepens the conflict within federal appellate courts. The Ninth Circuit’s decision contradicts an earlier favorable ruling from the Third Circuit regarding New Jersey’s regulations, producing a circuit split that demands higher judicial review. Kalshi is poised to pursue further appeals, potentially a Supreme Court petition or an en banc rehearing within the Ninth Circuit. The ruling also draws attention from the CFTC, which claims broad regulatory authority over these markets but now faces challenges as multiple states pursue enforcement actions.

Nevada’s Gaming Control Board, which had already secured preliminary injunctions against Kalshi and Polymarket, celebrated the ruling as validation that sports betting must be regulated at the state level. Chairman Mike Dreitzer emphasized Nevada’s commitment to enforcing its gaming laws to protect its regulated market. The decision affirms that Nevada can continue blocking Kalshi and similar platforms like Robinhood and Crypto.com from offering sports-event contracts within its jurisdiction, potentially strengthening Nevada's position in ongoing cases against other prediction-market operators.

Beyond Nevada, the ruling sets a precedent that state regulators could increasingly wield in their legal battles against prediction-market firms, with Illinois and Rhode Island already referencing it. It may also prompt new challenges under laws like the Indian Gaming Regulatory Act concerning the legality of sports-event contracts on tribal lands. Meanwhile, the CFTC’s attempts to assert exclusive federal jurisdiction face setbacks, as states gain momentum to regulate or block these markets. The unfolding litigation landscape will likely define the future of the prediction-market industry and its ability to operate across the U.S.