Ninth Circuit Rules Kalshi Sports Contracts Are Bets Not Federally Protected Swaps
A three-judge Ninth Circuit panel ruled on August 28, 2026, that Kalshi's sports event contracts qualify as sports bets under state law rather than federally preempted swaps under the Commodity Exchange Act, allowing Nevada gaming regulators to enforce state licensing requirements against the prediction market platform. The decision directly conflicts with a Third Circuit ruling from April 2026 that reached the opposite conclusion for similar contracts in New Jersey, creating a circuit split on whether federal commodities law shields prediction market operators from state gambling regulation. Nevada had already reached a separate agreement with Kalshi requiring geofenced blocking of sports contracts by August 12, 2026, with a $120,000-per-day penalty for noncompliance.