Federal Appeals Court Upholds Nevada Gambling Regulations on Kalshi

By the Editorial Team · Sunday, August 30, 2026

A federal appeals court upheld Nevada’s authority to regulate Kalshi, blocking the prediction market operator from resuming sports and election event contract trading in the state during ongoing legal disputes. This ruling underscores Nevada’s regulatory power over gaming activities and contributes to a growing conflict among courts that may prompt the U.S. Supreme Court to clarify states’ ability to oversee prediction markets.

A federal appeals court has upheld Nevada’s authority to regulate Kalshi, a prediction market operator, blocking the company from resuming trading on sports and election event contracts in the state while legal proceedings continue. The decision by a three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco was issued on Friday.

Kalshi had sought to continue operations during litigation with the state, arguing that federal commodities law, overseen by the Commodity Futures Trading Commission (CFTC), preempts Nevada’s gambling regulations. The company contended it functions as a “designated contract market” under the CFTC’s jurisdiction, not as a gambling platform subject to state regulation.

However, the appeals court panel found Kalshi’s argument unpersuasive, concluding that federal law likely does not override Nevada’s authority to regulate contracts related to sports events. Nevada, home to the largest commercial casino market in the United States, requires companies like Kalshi to obtain a license from the state gaming regulator in order to operate.

Nevada’s Attorney General’s office described the ruling as a significant victory that reaffirms the state’s long-established regulatory power over gaming activities. In a statement, the office said Kalshi had attempted to evade state laws by rebranding sports betting as “event contracts,” but the court rejected that characterization.

The appeals court sent the issue of Kalshi’s election-related contracts back to a lower court for further evaluation of Nevada’s challenges. This ruling comes amid ongoing litigation in roughly 20 states involving prediction market companies such as Polymarket, Robin Hood, and Kalshi. The decisions in these cases have been mixed; earlier this year, the 3rd U.S. Circuit Court of Appeals in Philadelphia ruled that New Jersey could not impose gambling regulations on Kalshi.

The conflicting rulings increase the likelihood that the U.S. Supreme Court may ultimately intervene to resolve whether states can regulate prediction markets under their gambling laws.

Following the appeals court decision, Kalshi stated it would seek additional judicial review. Meanwhile, the company confirmed that trading in Nevada on sports, entertainment, and election contracts remains suspended.

Nevada’s Gaming Control Board had issued a cease-and-desist order to Kalshi last year, declaring its trading activities unlawful under state law. Initially, a federal judge granted a preliminary injunction preventing Nevada from enforcing the order, but that injunction was later lifted, prompting Kalshi’s appeal to the 9th Circuit.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.