Ninth Circuit rejects Kalshi injunction, challenges CFTC jurisdiction claim

The Ninth Circuit upheld a ruling that Kalshi failed to show the Commodity Exchange Act preempts Nevada's gaming regulations for its sports event contracts. The court ruled that Kalshi could not keep an injunction blocking Nevada regulation. The Nevada Gaming Control Board sent Kalshi a cease-and-desist letter in 2025. The letter demanded that Kalshi stop offering election and sports event contracts in Nevada. The letter threatened criminal or civil charges. Kalshi sued the gaming board and Nevada. Kalshi sought a preliminary injunction against state regulation of its election and sports event contracts. A district court initially granted the injunction. The district court later dissolved it after a ruling against Crypto.com. The Ninth Circuit panel said the CEA likely does not preempt Nevada's gaming regulations as applied to Kalshi's sports contracts. Three judges also addressed whether the CFTC or Nevada regulators have jurisdiction over sports betting. CFTC Chair Michael Selig has said the agency has exclusive jurisdiction over prediction markets, including sports-related contracts. The CFTC has sued several states over regulation of the industry. The CFTC has also proposed a framework for regulating prediction markets. CFTC spokesperson Zach Fulton said the appeals court misread the statute and regulations. Fulton said the case could create a circuit split that warrants Supreme Court review. Kalshi spokesperson Dani Lever said the company still believes CFTC regulations do not prohibit sports contracts. Lever said Kalshi will seek further review.