Ninth Circuit court ruling undermines CFTC's exclusive jurisdiction claim in Kalshi's Nevada sports betting case, allowing state-level regulation to proceed.
Regulation & Gov ·
The Ninth Circuit Court of Appeals upheld a lower court's finding that Kalshi failed to demonstrate federal preemption over Nevada's sports betting authority, undermining the company's argument for exclusive CFTC jurisdiction. The ruling allows state-level regulation of sports betting to proceed without federal override, constraining Kalshi's ability to operate under a claimed federal regulatory framework.
The case centered on whether the Commodity Futures Trading Commission holds exclusive authority over derivatives markets in a way that preempts Nevada's own regulatory regime. Kalshi's position relied on interpreting federal commodity law as occupying the entire field, leaving no room for state enforcement. The appellate decision rejected that framing, suggesting that federal and state authorities can coexist in this regulatory space.
The ruling does not definitively close Kalshi's path forward, but it shifts leverage toward state-level oversight. Whether Kalshi will seek further appeal, pursue regulatory compliance within Nevada's framework, or pursue alternate jurisdictional strategies remains unresolved.