Kalshi just lost a big one. The US Court of Appeals for the Ninth Circuit ruled unanimously against the prediction market platform, dissolving a preliminary injunction that had previously kept Nevada’s gaming regulators at bay. The 3-0 decision in KalshiEX, LLC v. Assad means states can now move forward with enforcement actions against Kalshi’s sports event contracts.
The core question was deceptively simple: does Kalshi’s status as a CFTC-registered designated contract market make it immune to state gambling laws? The Ninth Circuit’s answer, delivered on August 28, 2026, was a firm no.
Federal shield, meet state sword
Kalshi’s argument rested on what seemed like solid ground. The company is registered with the Commodity Futures Trading Commission as a designated contract market, or DCM. Under the Commodity Exchange Act, the CFTC holds exclusive jurisdiction over futures and event contracts. Kalshi argued this federal framework should preempt state-level gaming regulations.
The Ninth Circuit found that Kalshi failed to demonstrate that the CEA actually preempts Nevada’s gaming regulations when it comes to sports event contracts. This wasn’t a snap judgment either. The case had been working its way through the system for months, with an oral argument held on April 16, 2026. The Ninth Circuit had already signaled its skepticism back in February 2026 when it denied Kalshi’s request for a stay that would have blocked state enforcement during the appeal.
