Ninth Circuit upholds end of Kalshi's injunction against Nevada over sports contracts
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What happened
The US Court of Appeals for the Ninth Circuit ruled on August 28, 2026, in KalshiEX, LLC v. Assad, that the district court did not abuse its discretion in dissolving a preliminary injunction that had barred Nevada from enforcing its gaming laws against Kalshi's event contracts. Kalshi had sued the Nevada Gaming Control Board, its members, the State of Nevada and the Nevada Attorney General after the board sent it a cease-and-desist letter in March 2025. Kalshi argued that, as a designated contract market registered with the CFTC, its sports event contracts fell under the CFTC's exclusive authority.
The panel said it disagreed with Kalshi's overly broad reading of the Commodity Exchange Act and that CFTC regulations currently prohibit offering contracts related to gaming on prediction markets. It affirmed the dissolution as to sports event contracts and remanded Kalshi's election contracts to the district court. The opinion said that over 90% of Kalshi's trades in 2025, representing 95% of its revenue, were sports related. It also noted that the Third Circuit had affirmed a preliminary injunction for Kalshi in a New Jersey case and that a Fourth Circuit appeal remained pending.
Key points
- On August 28, 2026, the Ninth Circuit affirmed in part and remanded in part the order dissolving Kalshi's preliminary injunction against Nevada.1
- The court affirmed the dissolution as to sports event contracts and remanded Kalshi's election contracts to the district court.1
- The panel held that Kalshi had not shown a likelihood that the Commodity Exchange Act preempts Nevada's gaming regulations as applied to its sports event contracts.1
- The opinion said sports-related trades were over 90% of Kalshi's trades in 2025, representing 95% of its revenue.1
- The opinion noted that the Third Circuit had affirmed an injunction for Kalshi in a New Jersey case and that a Fourth Circuit appeal remained pending.1
Why it matters
According to the opinion, sports-related contracts made up over 90% of Kalshi's trades in 2025 and 95% of its revenue. The ruling concerned those contracts in Nevada, which ties the decision directly to the main source of the company's revenue.
The opinion itself noted that the Third Circuit went the other way in a New Jersey case, and that the Fourth Circuit had not ruled. The legal footing of Kalshi's sports contracts therefore differed by jurisdiction at the time of the ruling.
The court sent the election contracts back to the district court and described them as a fraction of Kalshi's business, so the ruling did not decide their status in Nevada.
In context
| Round | Date | Post-money valuation | Raised | Led by |
|---|---|---|---|---|
| Series C | Jun 25, 2025 | $2.0B | $185M | Paradigm |
| Series D | Oct 10, 2025 | $5.0B | $300M | Andreessen Horowitz and Sequoia Capital |
| Series E | Dec 2, 2025 | $11B | $1.0B | Paradigm |
| Series F | May 7, 2026 | $22B | $1.0B | Coatue |
| Series F extension | May 20, 2026 | $22B | $200M | Unknown |
Updated
Fact-check
- The Ninth Circuit ruled on August 28, 2026, affirming in part and remanding in part the order dissolving Kalshi's preliminary injunction against Nevada.Confirmed by [1] US Court of Appeals for the Ninth Circuit: the opinion in KalshiEX, LLC v. Assad shows 'Filed August 28, 2026' and ends 'AFFIRMED IN PART AND REMANDED IN PART'.Verified
- The dissolution was affirmed as to sports event contracts, and Kalshi's election contracts were remanded to the district court.Confirmed by [1] US Court of Appeals for the Ninth Circuit: 'we affirm the district court's order dissolving the injunction as to sports event contracts. We remand for the district court to consider Kalshi's election contracts.'Verified
- The panel held Kalshi had not shown a likelihood that the CEA preempts Nevada gaming regulations as applied to its sports event contracts, disagreed with Kalshi's overly broad reading of the CEA, and said CFTC regulations currently prohibit gaming-related contracts.Confirmed by [1] US Court of Appeals for the Ninth Circuit: the opinion's introduction and staff summary state each point.Verified
- Kalshi sued the Nevada Gaming Control Board, its members, the State of Nevada and the Nevada Attorney General after a March 2025 cease-and-desist letter, arguing it is a CFTC-registered designated contract market under CFTC exclusive authority.Confirmed by [1] US Court of Appeals for the Ninth Circuit: the background section describes the March 2025 letter, the defendants and Kalshi's argument.Verified
- Over 90% of Kalshi's trades in 2025, representing 95% of its revenue, were sports related.Confirmed by [1] US Court of Appeals for the Ninth Circuit: 'Over 90% of Kalshi's trades in 2025, representing 95% of its revenue, were sports related.'Verified
- The Third Circuit affirmed a preliminary injunction for Kalshi in a New Jersey case, and a Fourth Circuit appeal remained pending.Confirmed by [1] US Court of Appeals for the Ninth Circuit: footnote 2 cites KalshiEX, LLC v. Flaherty (3d Cir. 2026) and says 'The Fourth Circuit appeal remains pending.'Verified
- The election contracts are a fraction of Kalshi's business.Confirmed by [1] US Court of Appeals for the Ninth Circuit: footnote 7 describes the election contracts as 'a fraction of Kalshi's business'.Verified
Sources
- [1]US Court of Appeals for the Ninth Circuit (opens in a new tab)KalshiEX, LLC v. Assadwe affirm the district court's order dissolving the injunction as to sports event contracts
- [2]Reuters (opens in a new tab)Kalshi cannot block Nevada oversight of prediction markets, US appeals court rules
