A federal appeals court panel has denied prediction market operator Kalshi’s request to resume trading on sports and election events in Nevada while it battles the state’s attempts to shut it down for operating without a gambling license. The 9th U.S. Circuit Court of Appeals in San Francisco ruled that federal commodities trading law likely does not preempt Nevada’s gambling regulations, emphasizing the state’s authority to regulate gaming within its borders. This decision adds to the ongoing legal battles surrounding prediction markets like Kalshi, Polymarket, and Robin Hood, with the potential for the U.S. Supreme Court to ultimately clarify whether states can regulate them under gambling laws.

Despite Kalshi’s claims that it is a designated contract market subject to federal regulation by the Commodity Futures Trading Commission, Nevada’s gaming board asserts that trading on sporting events and election outcomes is unlawful within the state. The court’s ruling upholds Nevada’s position, halting Kalshi’s operations in Nevada for the time being and signaling a victory for the state’s long-standing regulatory authority over gaming. Kalshi plans to seek further review of the decision as the legal battle continues.