The Ninth Circuit ruled Friday that Kalshi's sports event contracts are not swaps under the Commodity Exchange Act, clearing the way for Nevada to enforce its gaming laws against the prediction market.
The decision turns on a single question with large commercial stakes: if the contracts are swaps, the Commodity Futures Trading Commission has exclusive jurisdiction over them and states are locked out. The Aug. 28 opinion in KalshiEX LLC v. Assad says they are not, so Nevada's gaming regime applies. Kalshi now faces state gaming enforcement in Nevada while the identical product remains federally shielded in New Jersey, where the Third Circuit ruled the other way in April.
The CEA defines a swap to include an agreement dependent on "the occurrence, nonoccurrence, or the extent of the occurrence of an event." Kalshi argued its sports contracts fit, which would place them under exclusive CFTC oversight and outside Nevada's reach.
The panel rejected that reading. Whether the Super Bowl happens is the occurrence of an event, the court said; whether a particular team wins it is the outcome of an event. Kalshi's broad interpretation, the panel added, "knows no limiting principle because anything could be defined as an event."
