TLDR
- The Ninth Circuit unanimously denied Kalshi’s petition for rehearing in its Nevada case.
- No judge requested a vote for a full-court review.
- Nevada’s ban on Kalshi’s sports event contracts stays in place.
- Kalshi has 90 days to ask the U.S. Supreme Court to hear the case.
- Public comments on the CFTC’s proposed event contract rule are due November 18.
Kalshi now has 90 days to decide whether to take its fight with Nevada gaming regulators to the U.S. Supreme Court. The clock started after a federal appeals court refused to reconsider its earlier ruling against the prediction market company.
On Wednesday, November 4, the U.S. Court of Appeals for the Ninth Circuit denied Kalshi’s petition for a panel rehearing and rehearing en banc. No judge on the court asked for a vote on a full-court review, according to CDC Gaming.
The three-judge panel rejected the rehearing request unanimously. Kalshi can now file a petition for a writ of certiorari, which asks the Supreme Court to take up the case.
What the Ninth Circuit Decided
The dispute centers on sports event contracts offered on Kalshi’s platform. Nevada gaming regulators moved to block these contracts under state gambling laws.
The Ninth Circuit earlier upheld a decision to dissolve a preliminary injunction that had shielded Kalshi from Nevada enforcement. The court ruled unanimously that sports event contracts do not meet the definition of a swap.
Because of that finding, the court said the contracts are not protected from bans under state gambling laws. The ban on Kalshi’s sports event contracts remains in place in Nevada, and the company no longer has protection against state enforcement.
Kalshi argued that the panel wrongly treated sports event contracts as sports betting. It asked the court to review the ruling, but that request has now been turned down.
In its 78-page petition, Kalshi said the decision exposed it to civil and criminal liability. The company noted that it is regulated by the Commodity Futures Trading Commission (CFTC) as a federally designated contract market.
“As a result, Kalshi now stands exposed to civil and criminal liability, even though it is abiding by federal law and the mandate of its exclusive federal regulator,” the brief reads.
Kalshi also said the ruling created a circuit split on federal preemption. It claimed the court’s reasoning was internally inconsistent and conflicted with the Commodity Exchange Act.
Timing the Supreme Court Petition
Kalshi is represented by Paul Clement. He may try to coordinate the Nevada case with pending Third Circuit litigation that has already been filed with the Supreme Court.
Clement may also try to delay Supreme Court review long enough for the CFTC’s rulemaking to become final. That rulemaking is still open for public input.
On October 9, the CFTC issued a Notice of Proposed Rulemaking along with a companion Interim Final Rule. Both aim to clarify jurisdiction over event contracts, including sports event contracts on prediction markets.
Federal appeals courts are divided on a key legal question. The split concerns whether federal derivatives rules under the Dodd-Frank Act and the Commodity Exchange Act override state and tribal gaming laws for prediction market contracts, especially sports contracts.
Kalshi’s 90-day window to file with the Supreme Court runs into early February 2027. The CFTC’s rule process has its own deadlines before then.
Public comments on the CFTC’s proposed rule are due by November 18. That date falls exactly two weeks after the Ninth Circuit’s denial.
