Full Breakdown
Nevada Court Affirms State Power to Regulate Online Prediction Markets
8/29/2026, 7:53:16 PM
Core Event
A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit in San Francisco ruled that Nevada’s gambling statutes apply to “sports-event contracts” offered by prediction-market operator Kalshi. The court rejected Kalshi’s claim that its contracts are federally regulated swaps and therefore exempt from state law, sending the question of election-related contracts back to a lower court. The decision blocks Kalshi from offering sports, entertainment, and election contracts to Nevada users until the company obtains a state gaming license.
Background & Context
Prediction markets such as Kalshi, Polymarket and Robinhood have surged in popularity, drawing billions of dollars in trades on topics ranging from elections to reality-TV outcomes. The rapid growth has sparked a nationwide legal clash, with roughly 20 states litigating whether such platforms fall under state gambling regulations or the federal Commodity Exchange Act, which governs swaps. A prior Third Circuit ruling in Philadelphia held that Kalshi’s sports contracts were swaps, granting federal pre-emption; the Ninth Circuit’s contrary view creates a circuit split that may prompt Supreme Court review.
Court Decision Details
Judge Ryan Nelson authored the opinion, stating that Kalshi’s contracts are “sports bets,” not swaps, and therefore subject to Nevada’s gambling laws. The panel found Kalshi had not presented a persuasive argument that federal commodities law pre-empted the state’s authority. The ruling does not address the broader question of whether states can regulate prediction-market contracts generally, leaving that issue for future litigation.
Official Statements & Responses
Ford added that Nevada will continue to protect consumers and the integrity of its gaming industry.
Kalshi’s spokeswoman Dani Lever said the company believes CFTC regulations do not prohibit its sports contracts and announced that Kalshi will “seek further review” of the decision.
Verbatim Quote
“The Ninth Circuit has now teed up a circuit split that calls out for resolution by the Supreme Court,” — Zach Fulton, a spokesman for theCommodity Futures Trading Commission, or C
