A Kalshi advertisement seen in Washington D.C. on March 27, 2026.
Paul Lester | CNBC
The Ninth Circuit Court of Appeals has denied injunctions sought by prediction‑market platforms Kalshi and Crypto.com against Nevada’s Gaming Control Board. In a decisive opinion, the court held that sports‑related event contracts constitute gambling rather than federally regulated derivatives.
The ruling rejected separate appeals from Kalshi and Crypto.com, both of which had sought to halt Nevada’s enforcement actions that classify their offerings as illegal gambling. The court also dismissed a similar request from Robinhood, which also provides event contracts on its platform.
The dispute centers on whether these contracts are “swaps” under the Commodity Futures Trading Commission’s (CFTC) authority. The platforms and the CFTC argue that event contracts are swaps—a type of derivative—and that only the federal agency can regulate them. Nevada and 44 other states counter that the contracts are essentially sports betting and fall under state gaming regulators’ purview.
The Ninth Circuit concluded that the contracts are “sports bets,” not swaps, thereby rejecting the CFTC’s claim of exclusive jurisdiction. Legal scholars anticipate that the circuit split—highlighted by a conflicting Third Circuit decision earlier this year—will eventually prompt Supreme Court review.
“This is a classic circuit split,” said Joshua Mitts, a professor at Columbia Law School. “Differences of opinion like this often make their way to the Supreme Court.”
Kalshi, Crypto.com, Robinhood, the CFTC, and Nevada’s Attorney General’s office did not immediately respond to comment requests. Meanwhile, shares of established sportsbooks DraftKings and Flutter Entertainment—both of which have been developing prediction‑market offerings—rose sharply following the decision: DraftKings gained 7%, and Flutter climbed more than 6%.
The case marks a pivotal moment for the emerging prediction‑market industry and could reshape the regulatory landscape for event‑based trading platforms in the United States.