A federal appeals court ruled today that Kalshi cannot bar Nevada from regulating its prediction markets platform where users place bets on sports events.
The 9th U.S. Circuit Court of Appeals in San Francisco handed down a 3-0 decision, concluding that federal commodity trading law likely does not shield Kalshi from state-level gaming rules when it comes to sports betting contracts offered on the platform.
That ruling stands in direct tension with an April decision from the 3rd U.S. Circuit Court of Appeals in Philadelphia, which reached the opposite conclusion and found that New Jersey does not have the authority to regulate Kalshi’s platform.
The divergence between the two appellate courts creates a legal split. Observers say that split increases the chances the U.S. Supreme Court may be asked to intervene to settle which authority should govern prediction markets - state governments or the U.S. Commodity Futures Trading Commission.
Context and legal posture
The 9th Circuit’s unanimous panel determined that federal commodities law likely does not preempt Nevada from applying its gaming statutes to the sports-betting contracts offered by Kalshi. The court’s view contrasts with the earlier ruling from the 3rd Circuit, which concluded New Jersey lacked regulatory authority over the same platform.
Because two federal appellate courts have reached opposing conclusions on the same legal question, the matter remains unsettled at the national level. That disagreement is the central reason the case could be pressed for Supreme Court review to obtain an authoritative resolution of regulatory responsibility.
What remains unresolved
- Which regulatory body - state gaming authorities or the U.S. Commodity Futures Trading Commission - will have the final say over prediction market products remains undecided.
- The conflicting appellate rulings leave operators and regulators in different jurisdictions with inconsistent legal guidance.