Ninth Circuit denies Kalshi rehearing in Nevada sports-contract case

The U.S. Court of Appeals for the Ninth Circuit has rejected KalshiEX’s effort to reopen its Nevada case, leaving in place an August ruling that permits state gaming authorities to enforce Nevada law against the company’s sports-related event contracts.

In an order issued Nov. 4 in KalshiEX, LLC v. Assad, No. 25-7516, a three-judge panel unanimously denied both panel rehearing and rehearing by the full court. The order said the full Ninth Circuit had been notified of the en banc request, but no judge sought a vote on whether to rehear the case.

The decision starts Kalshi’s 90-day period to seek Supreme Court review. It does not itself resolve the wider federal-state dispute, but it preserves the Ninth Circuit’s conclusion at this stage that Nevada may apply its gaming regulations to Kalshi’s sports contracts.

As we reported in September, Nevada had urged the court to reject Kalshi’s request to pause or reconsider rehearing while the Commodity Futures Trading Commission reviewed its event-contract regulation.

The Aug. 28 ruling affirmed in part the dissolution of a preliminary injunction that had barred Nevada enforcement. The dispute began after the Nevada Gaming Control Board sent Kalshi a cease-and-desist letter alleging that it was operating a sports-betting platform in violation of state statutes and gaming rules.

The Ninth Circuit held that Kalshi’s sports-event contracts were not swaps under the Commodity Exchange Act. Although the statute expressly preempts state regulation of swaps traded or executed on a designated contract market, the court concluded that protection did not apply to these contracts. It also rejected Kalshi’s arguments that Nevada law conflicted with federal commodities law or frustrated its purposes.

The panel further held that Kalshi’s self-certification and listing of gaming-related contracts were unlawful under the Commodity Exchange Act’s special rule and CFTC regulation 17 C.F.R. § 40.11. It returned Nevada’s separate challenge to Kalshi’s election contracts to the district court for further consideration.

The case sits within an appellate split. In April, the Third Circuit, in a divided ruling, found that Kalshi’s sports-related contracts were swaps and that the CFTC had exclusive jurisdiction, affirming an injunction against New Jersey enforcement. It reasoned that the contracts depended on events associated with potential economic consequences and that state regulation would obstruct the federal statutory scheme.

New Jersey has petitioned the Supreme Court to review the Third Circuit ruling. Robinhood Derivatives and North American Derivatives Exchange, doing business as Crypto.com, also filed Supreme Court petitions in September challenging the Ninth Circuit’s Aug. 28 decision in consolidated appeals. Kalshi may now seek Supreme Court review.