A U.S. Court of Appeals for the Ninth Circuit ruling that Nevada can enforce its gaming laws against Kalshi was seen as a crucial win by the state’s congressional delegation, as analysts believe the legal battle is far from over.
“This is a positive step toward upholding our gaming laws in Nevada,” said Representative Dina Titus, a Democrat whose First Congressional District includes the Las Vegas Strip. “Three Trump appointed judges reaffirmed the basic principle that state and tribes should be the ones to regulate gambling within their borders. If it looks like sports betting and talks like sports betting, it is sports betting.”
Representatives Susie Lee and Steven Horsford, both Democrats, took to social media to praise the court’s decision. As CDC Gaming reported on Friday, Kalshi confirmed it would seek further review of the ruling that allows Nevada to ban the company and other prediction markets from operating in the state.
The ruling also banned Crypto.com and Robinhood from offering sports-event contracts in Nevada.
Lee called the decision a “win for Nevada and for states’ longstanding right to regulate gambling.”
“No matter how you spin it, betting on the outcome of a sporting event is clearly gambling,” Lee posted on X. “Nevada’s comprehensive licensing enforcement and consumer protection systems are designed specifically to address the risks associated with sports betting.”
Lee added that they can’t allow large corporations to avoid these regulations. “As prediction markets expand and evolve, Washington should not steamroll states and tribes and take the side of big corporations who profit from avoiding state laws.”
Horsford said the ruling was good news, but called on Congress to pass the bipartisan Prediction Markets Are Gambling Act.
The legislation, co-sponsored by Republican Representative Mark Amodei of Nevada makes it clear that the Commodity Futures Trading Commission (CFTC) oversees legitimate financial markets, not sportsbook-style gambling or casino games. It closes a federal loophole that allows companies to bypass the licensing requirements, consumer protections, tax obligations, and regulatory oversight that apply to legal gaming operators.
Senators Catherine Cortez Masto, D-NV, Adam Schiff, D-Calif., and John Curtis, Re-Utah, introduced companion legislation in March.
“This issue is far from settled and will likely make its way to the U.S. Supreme Court,” Horsford said. “Congress must act now to make clear, once and for all, that sports betting, and gambling at large, belong under state and tribal gaming laws.”
Ruling implications
Barry Jonas, an analyst with Truist Securities, said the Ninth Circuit ruling could potentially drive more state bans, as the nine states within the court’s oversight, including Arizona, California, Washington, and Montana, are now bound to the circuit’s reasoning.
In a research report, Jonas wasn’t certain how many states will decide to ban Kalshi sports event contracts. Kalshi is restricted in Massachusetts, Nevada, Michigan, and Washington.
Both Jonas and Dan Politzer, an analyst with J.P. Morgan, believe the issue over sports-event contracts will eventually be taken up by the Supreme Court.
“Of note, the Ninth Circuit decision conflicts with the Third Circuit Court’s more favorable ruling that the CFTC has exclusive jurisdiction over sports-related event contracts,” Politzer wrote. “With the circuit court opinions split on the regulatory status of sports predictions … the issue could be pushed to SCOTUS.”
Jonas noted that it could take 10 to 22 months for some resolution to the regulatory status of prediction markets.
“Ultimately, we think certainty from an eventual SCOTUS decision should be helpful for gaming equities,” Jonas wrote. “A Kalshi victory could make prediction markets the new normal and allow all online sports betting operators … to adapt, given their sports betting expertise.
“A Kalshi loss could severely limit prediction markets, or maybe shift regulation to the states, and potentially boost ‘legacy’ online sports betting businesses in the eyes of investors,” Jonas added.
Currently, two court ruling are still pending, which could potentially deepen the split ahead of a Supreme Court review. The U.S. Court of Appeals for the Fourth Circuit is weighing whether Maryland can enforce state gambling laws against Kalshi. The appeal was heard in May.
Meanwhile, a three-judge panel of the U.S. Court of Appeals heard oral arguments in July, in consolidated legal challenges involving efforts by Ohio and Tennessee to regulate prediction markets under state gaming laws.
New Jersey has until Thursday to appeal the Third Circuit’s decision and ask the Supreme Court to review the case.
“The Supreme Court is not required to take the case, though a spilt circuit increases its likelihood,” Jonas wrote. “We could see some SCOTUS resolution by the summer of 2027 or 2028.”
