Kalshi Lawsuit: Nevada Opposes Delay
Nevada has asked the US Court of Appeals for the Ninth Circuit to reject Kalshi’s request to delay a decision on its petition for rehearsing en banc, which is the latest filing in the Kalshi lawsuit.
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Nevada has asked the US Court of Appeals for the Ninth Circuit to reject Kalshi’s request to delay a decision on its petition for rehearsing en banc, which is the latest filing in the Kalshi lawsuit. The exchange wants the court to wait until the CFTC publishes a revised 17 CFR 40.11, which is the rule on event contracts involving gaming.
So far, the court has not ruled on a decision.
What Nevada Filed
The Opposition Brief
Kalshi sent a letter to the court on 25 September 2026. It argued that the CFTC has said it intends to revise the 17 CFR 40.11 rule within two months, so the court should grant rehearing en banc, or hold the petition until the rule is revised and published.
En banc asks the Ninth Circuit to reconsider a three-judge panel’s decision. That’s the panel ruling in the Kalshi lawsuit Nevada case from August. Nevada’s stance is to deny the petition without waiting. The filing was reported on 4 October 2026.
Nevada’s Core Argument
Nevada’s position is that a delay won’t change the outcome. The state has said that the panel held that Kalshi’s sports event contracts are not swaps based on the text, context, and purposes of the Commodity Exchange Act, not on the CFTC’s regulation.
Nevada says that the court cited 17 CFR 40.11 (a) only to reject one of Kalshi’s arguments. The court already knew that the CFTC planned to revise the section when it ruled. Per Nevada’s lawyer, Kalshi’s request was another attempt at a delay.
Who Is Arguing for Nevada
The opposition for Nevada was filed by Nicole Saharsky, an attorney at law firm Mayer Brown. She’s hired as outside counsel, not a Nevada state official.
Nevada’s gaming regulators are the agencies whose oversight of Kalshi is at issue. Our regulators hub covers how these agencies work in detail.
Why Kalshi Wants to Wait
The Rule Kalshi Is Waiting On
CFTC’s 17 CFR 40.11 is the event contracts rule that involves gaming and other listed activities. Regardless if it’s politics, sports, or elections, event contracts pay out if a real-world event happens. For more information, check our guide that explains what prediction markets are.
Kalshi is a CFTC-designated contract market operator. Its argument is that federal laws provide the CFTC oversight of its available sports event contracts. In this lawsuit, Kalshi also argues that a special event contract rule shows Congress meant the CFTC regulates these operators.
Nevada’s stance is that the CFTC’s statement tells the court when revisions might happen, but not what it would say.
Two Proposals, Not Yet Published
The CFTC reportedly sent two proposed rules to the White House Office of Information and Regulatory Affairs, Office of Management and Budget division, that reviews federal regulations before they are published.
The first of the two proposals would define a swap to include event contracts. As for the second, it would exclude casino-style gambling products from the definition. Neither has been published and is not in force. Check out the CFTC page to track the rulemaking and latest changes.
What Would Actually Change
The stakes surrounding this lawsuit are simple. If event contracts are defined as swaps, federal law has a stronger claim over them, and that’s the whole fight at the moment. Per Kalshi, a revised rule is a reason to wait. Nevada says that a revised 17 CFR 40.11 is not enough to change a ruling that’s already rested on the Act’s text. As of 6 October 2026, neither version of the revised rule is live.
The Rulings Stacking Up Against Kalshi
In the past five weeks, there have been four federal rulings on Kalshi. Three went against Kalshi, and the fourth, in Illinois, went its way.
While they don’t all agree, it puts Kalshi under scrutiny. See our prediction markets tracker to check where each contract stands.
Nevada and the Ninth Circuit
A three-judge panel of the Ninth Circuit ruled with a 3-0 vote on 28 August 2026 that Kalshi can’t block Nevada’s gaming regulators from overseeing its platform. Per the panel’s ruling, the Commodity Exchange Act likely does not preempt state gaming law.
This raises the question “Is Kalshi legal in Nevada?” Per this ruling, state regulators can oversee the platform at the moment, but it’s in the preliminary stage, and Kalshi’s petition for a rehearsal still has a pending status.
A Separate Ruling on Tribal Land
In a different case in the Ninth Circuit, Blue Lake Rancheria v. Kalshi, the ruling on 16 September 2026 was that two California tribes are likely to succeed in arguing that the exchange’s sports contracts, when entered from tribal lands, are not authorized under the Indian Gaming Regulatory Act.
This is a separate case that raised another question, and doesn’t replace the Nevada ruling.
Ohio and Tennessee
On 25 September 2026, the US Court of Appeals for the Sixth Circuit ruled that Ohio and Tennessee may enforce their gambling laws against Kalshi. The court rejected the argument that the Commodity Exchange Act protects Kalshi’s sports events.
What the ruling did is affirm the denial for an injunction in Ohio, while vacating one in Tennessee at a preliminary stage.
Illinois Cuts the Other Way
A Preliminary Injunction, Partly Granted
While on the subject of preliminary injunctions, one was granted recently in Illinois. On 2 October 2026, US District Judge Martha M. Pacold of the Northern District of Illinois partially granted requests by Kalshi, Coinbase, and the CFTC for preliminary injunctions.
The judge found that the state’s gaming licensing rules and criminal provisions related to it are likely in conflict with federal laws on sports event contracts. She also found that such contracts are likely swaps as outlined in the Commodity Exchange Act.
This injunction went in Kalshi’s way. However, it’s still a preliminary ruling that should be confirmed, and not a final judgment on Illinois restrictions for this type of contract.
What Is Still Unresolved
The injunction’s precise terms are yet to be drafted. Before that happens, the involved parties must submit a proposed injunction by 29 October 2026. The ruling doesn’t yet decide whether Illinois can charge fees.
Per the Illinois Gaming Board, sports event contracts are illegal and untaxed gambling. The state’s legislature imposed a transaction tax of 1.75%-3.5% on sports contracts offered by prediction markets such as Kalshi.
What to Watch Next
There are three things to watch next before a ruling is official. First, the Ninth Circuit should decide on Kalshi’s petition for rehearing. Second, the CFTC should publish revised rules, and third, the Illinois injunction terms are due by 29 October 2026.
Each of the three is focused on the same question: whether federal law gives the CFTC the final say over sports events contracts, or leaves some room for state gaming law.
The Third Circuit sided with Kalshi in New Jersey earlier this year, and the state has asked the US Supreme Court to review it. To catch up with the latest developments, follow the prediction markets hub.
