Nevada has opposed Kalshi’s request to delay proceedings on its rehearing petition in the Ninth Circuit while the CFTC develops proposed event-contract rules, keeping the state’s challenge to the platform’s operations before the court.
The dispute is part of a broader fight over whether federal commodities law prevents Nevada from applying its gaming rules to Kalshi’s sports-event contracts. CDC Gaming reported that Nevada’s filing argues a coming revision to a CFTC rule would not change the legal basis for the court’s decision.
Nevada says the statutory analysis still applies
In a September 25 letter, Kalshi argued that the Ninth Circuit should grant its petition for rehearing en banc or hold the petition until the CFTC publishes a revised version of Rule 40.11. The company pointed to the agency’s stated intention to revise the rule within the next two months.
Nevada’s opposition was filed by Nicole Saharsky, an attorney at Mayer Brown representing the state. Saharsky argued that the CFTC’s plans were already known when the court issued its decision and that a later rule change would not alter the court’s analysis of whether the sports-event contracts are swaps under the Commodity Exchange Act.
The CFTC had submitted two proposed rules related to prediction markets to the White House Office of Information and Regulatory Affairs for review. One addresses the definition of swaps to include event contracts; the other concerns excluding casino-style gambling products. The proposals had not yet been published as final rules.
A series of rulings tests Kalshi’s position
In August, a unanimous three-judge Ninth Circuit panel ruled that Kalshi could not block Nevada gaming regulators from overseeing its prediction-market platform. The court said the CEA likely does not preempt state gaming law, leaving Nevada’s regulators able to pursue oversight while the legal dispute continues.
The United States Court of Appeals for the Ninth Circuit courthouse.The ruling is one part of Nevada’s wider effort to apply state gaming rules to sports prediction contracts, alongside Kalshi’s argument that federal oversight applies. The state’s position in the rehearing dispute follows that same line: it says the court’s earlier decision rests on the statute, not on the wording of a CFTC rule. Nevada’s oversight dispute with Kalshi is also unfolding against separate challenges involving other jurisdictions.
In a separate case, the Ninth Circuit ruled in Blue Lake Rancheria v. Kalshi that the CEA does not authorize sports betting on tribal land. The Sixth Circuit has also ruled that Ohio and Tennessee can enforce their sports-gambling laws against Kalshi, rejecting the company’s argument that the CEA protects its sports-event contracts.
Another proceeding in Illinois is distinct from the Ninth Circuit case. A federal judge there granted in part preliminary-injunction requests by Kalshi, Coinbase and the CFTC, finding that state gaming licensing rules conflict with federal law governing sports-event contracts; the exact terms of the injunction remained to be drafted.
Rehearing petition and rule review remain pending
The Ninth Circuit has yet to decide whether to grant Kalshi’s rehearing petition or hold it until the CFTC publishes a revised rule. Nevada wants the court to proceed without waiting, saying the rulemaking does not change the statutory question before it.
The CFTC proposals remain in OIRA review, according to the filing account. Their eventual form could affect the wider federal framework for event contracts, but the immediate question for Kalshi is whether the Ninth Circuit will revisit its ruling while that process continues. The proposals and the state-level litigation are part of the same jurisdictional dispute, but neither resolves the other.
ReadWrite has reported on the CFTC’s proposed prediction-market rules as the agency seeks to clarify its approach to event contracts.
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