Ninth Circuit Upholds State And Tribal Authority Over Sports-Related Event Contracts

The U.S. Court of Appeals for the Ninth Circuit on August 28, 2026, handed down a significant appellate decision involving Kalshi, affirming in substantial part the district court's order dissolving Kalshi's preliminary injunction against Nevada's gaming regulators. At bottom, the court held that Kalshi failed to show a likelihood that the Commodity Exchange Act (CEA) preempts state gaming regulations as applied to its sports-related event contracts. The court remanded only the separate issue of election contracts for further analysis by the district court.

The Ninth Circuit's decision is a major victory for states, Tribes and gaming regulators opposing Kalshi's argument that federally regulated prediction markets can offer sports betting nationwide without complying with state gaming laws. The court affirmed the district court's dissolution of Kalshi's preliminary injunction against Nevada and held that Kalshi was unlikely to succeed on its claim that the CEA preempts Nevada's gaming regulations as applied to its sports-related event contracts. The court remanded only the separate issue of election contracts for further consideration.

For those who work in Indian gaming and Tribal regulatory law, the opinion provides meaningful support for a principle long advanced: The regulation of gambling has been and remains a matter for states and Tribes, not an incidental byproduct of federal derivatives oversight. Judge Kenneth K. Lee's concurrence reinforces this point, expressly noting the historical role of Indian Tribes in regulating sports gambling. The court's reasoning should bolster Tribal and state regulators who are evaluating whether emerging prediction market platforms must comply with existing gaming frameworks before offering sports-related contracts to their residents.

A word of caution is warranted: The legal landscape is not fully settled. Other courts addressing similar questions have reached different results, and the Ninth Circuit itself remanded the election contract issue without deciding it. Continued litigation is likely as prediction market operators test the boundaries of federal preemption in other jurisdictions, but the decision provides a significant foundation for states, Tribes and gaming regulators seeking to preserve their traditional authority over sports wagering.