Ninth Circuit Ruling Leaves Kalshi’s Sports Betting Model Exposed

Writing for the unanimous panel, Circuit Judge Ryan Nelson determined that Kalshi’s sports-based products function as traditional wagers rather than financial swaps under the Commodity Exchange Act. The court emphasized that the Commodity Futures Trading Commission is not a national gambling regulator, noting that labeling a sports contract as a swap does not strip states of their long-standing authority to supervise wagering. The decision affirms a November 2025 ruling by U.S. District Judge Andrew Gordon, which dissolved an injunction that had previously shielded Kalshi from Nevada’s cease-and-desist orders.

This ruling creates a significant circuit split, as it conflicts with an April decision from the Third Circuit that previously favored Kalshi in a dispute with New Jersey. Legal observers suggest the company may now seek Supreme Court intervention to resolve the inconsistent appellate landscape. While the Ninth Circuit’s decision provides a clear victory for Nevada, the panel remanded the portion of the case involving Kalshi’s election contracts back to the district court for further review. As states like Connecticut, Washington, and Arizona continue to challenge the platform's legality, the future of Kalshi’s sports-based offerings remains tethered to a fragmented web of state-level enforcement and federal judicial scrutiny.