A Panel of Three Trump Appointees Rules That Kalshi’s Sports Contracts Are Gambling, Not Swaps — Handing Nevada the Power to Regulate Prediction Markets, Splitting With the Third Circuit, and Sending the Whole Fight Toward the Supreme Court
On Friday, August 28, 2026, a three-judge panel of the Ninth Circuit — all Trump appointees, ruling without dissent — held that Kalshi's sports event contracts are not "swaps" under the Commodity Exchange Act, and that federal registration with the CFTC therefore does not preempt state gaming law. The decision upheld a Nevada federal judge's ruling dissolving the injunction that had let Kalshi keep offering sports contracts in the state without a gaming license, and it applies across the Ninth Circuit to platforms including Kalshi, Crypto.com and Robinhood. It is the largest courtroom win to date for the states and tribes that have argued the prediction-market industry built a federal back door around state gambling regulation. It also creates a direct circuit split: the Third Circuit held in April that event contracts are swaps subject to exclusive CFTC jurisdiction. That split is the classic setup for Supreme Court review, and every party to the fight said so within a day. The congressional dimension is a bipartisan Nevada bill. Rep. Steven Horsford (D) and Rep. Mark Amodei (R) introduced the Prediction Markets Are Gambling Act in July 2026 to write the state-and-tribal-jurisdiction rule into statute rather than leave it to litigation; Sens. Adam Schiff, John Curtis and Catherine Cortez Masto have a Senate companion, and Rep. Dina Titus has a separate bill, the Fair Markets and Sports Integrity Act. Horsford's response to the ruling was to treat it as leverage rather than a finish line: "the fight is not over," and Congress should pass the bill before the Supreme Court takes the question away. Nevada's Republican governor, Joe Lombardo — a former Clark County sheriff who oversees the state whose gaming regulators brought the case — welcomed the ruling in the same terms, saying sports-event contracts are gambling and must comply with Nevada's licensing regime. Arizona's attorney general, whose criminal case against Kalshi a federal judge had blocked in May, said the decision was a significant win for state authority and that her office was reviewing what it means for that prosecution.
“The Ninth Circuit affirmed what Nevadans have always known: prediction markets are gambling. This is an important victory for States’ and Tribes’ authority to regulate gambling. But the fight is not over.”