Overview
- The Ninth Circuit, which ruled on Aug. 28, dissolved a prior injunction that had shielded Kalshi and held Nevada may enforce its gaming laws against the company’s sports‑event contracts.
- The panel rejected Kalshi’s claim that its contracts are federally preempted swaps because the products function as sports bets rather than traditional derivatives.
- The ruling conflicts with a Third Circuit decision that sided with Kalshi, creating a clear circuit split that makes Supreme Court review more probable.
- The opinion raised major‑questions concerns about the breadth of CFTC authority, leaving the agency’s June proposal to amend Rule 40.11 legally vulnerable even though the court did not strike down the rulemaking itself.
- States can now cite the Ninth Circuit opinion to press enforcement, which could mean fines, geofencing and state‑by‑state access limits for platforms and a possible shift of some activity offshore or to onchain venues.