Ninth Circuit Upholds Nevada Ban on Kalshi Sports Contracts as Tribes Back Supreme Court Challenge

The U.S. Court of Appeals for the Ninth Circuit unanimously rejected Kalshi’s broad reading of the Commodity Exchange Act on sports event contracts. The court held that U.S. District Judge Andrew Gordon did not abuse his discretion by allowing the Nevada Gaming Control Board to ban the unlicensed operator from offering those contracts in the state.

Mike Dreitzer, chairman of the NGCB, said the agency’s opposition has been consistent. “It’s about telling the truth and protecting consumers,” Dreitzer said. He detailed a regulatory system that addresses licensing, suitability, responsible gaming, anti-money laundering, taxation, integrity, and underage gambling for those under 21. Dreitzer added that the CFTC is not a national gambling regulator. He voiced deep concern for 18-, 19-, and 20-year-olds, noting losses could come from tuition, rent, and necessities. “We should be especially careful when gambling is presented as investing, because it is not investing,” he said. Dreitzer called the ruling an important milestone but said the fight continues, as reported by CDC Gaming.

Tribal Support for New Jersey Supreme Court Case

Gaming tribes are signing an amicus brief to support New Jersey’s effort to overturn an appeals court decision that Kalshi’s sports event contracts fall under CFTC regulation, said Rebecca George, executive director of the Washington Indian Gaming Association. George has tracked prediction market issues since January 2025. She said gambling is the biggest revenue source for tribes and that prediction market gains come “off the backs of tribes.” “We haven’t had this kind of attack on states and tribes ever. It will land in the Supreme Court,” George said. She pointed to the Cabazon decision in 1987 and the Indian Gaming Regulatory Act of 1988. “Gambling is a states’ rights issue,” George said. Quantifying exact revenue losses remains difficult, she added, but the pool of gambling dollars is finite.

Separately, Kalshi fined and suspended three candidates who bought contracts tied to their own races. Stephen Cloobeck paid a $31,770 penalty after purchasing approximately $10,000 in contracts and received a three-year suspension. In North Carolina, Laurie Buckhout faced a $2,589.96 fine for fewer than $1,000 in contracts and a three-year suspension. “I bet on myself. Literally. It was a dumb mistake,” Buckhout said. In Maine, Ben Midgley received a $5,430.30 penalty and three-year suspension. He described the platform as “a novelty and entertainment source.”

The Jurisdictional Fight Ahead

The Ninth Circuit decision and tribal mobilization underscore that prediction markets cannot sidestep state gaming laws through federal commodity labeling. With the matter now poised for Supreme Court review, regulators and operators face prolonged uncertainty over whether CFTC oversight can displace established state and tribal frameworks.

Reporting: CDC Gaming

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