Kalshi’s request for an injunction allowing it to offer sports-related prediction market bets in Nevada while litigation with the state plays out was rejected by the 9th Circuit Court of Appeals in a 3-0 opinion on Friday.
That means Kalshi must keep Nevada users blocked from its most popular betting category for the foreseeable future—a ding on its revenue potential at a time the company is reportedly seeking to raise more money at a $40 billion valuation. More worrisome is the prospect of the ruling echoing in other West Coast states.
Judges Ryan D. Nelson, Bridget S. Bade and Kenneth K. Lee reviewed the appeal, which hinges on whether the federal Commodity Exchange Act supersedes Nevada’s state gambling laws when it comes to sports bets on prediction markets.
Nevada believes Kalshi and its peers offer a form of unregulated gambling. The companies argue they are a financial asset lawfully operating under the watch of the Commodity Futures Trading Commission (CFTC).
The Commodity Exchange Act “likely does not preempt Nevada’s gaming regulations as applied to Kalshi’s sports event contracts,” according to the three-judge panel.
