Kalshi loses rehearing bid in Nevada case

The US Ninth Circuit Court of Appeals denied Kalshi's request for rehearing in the Nevada case on October 4. The decision was unanimous: both the panel rehearing and full court review requests were rejected, and no judge asked for a full court vote. With this outcome, Nevada state regulators remain free to proceed with enforcement action against the company.

Kalshi has 90 days to petition the US Supreme Court. The company is represented by attorney Paul Clement. It may also try to coordinate the process with a separate case before the Third Circuit Court of Appeals.

In an earlier ruling, the court held that the sports event contracts offered by Kalshi do not fall within the definition of a swap under the Commodity Exchange Act (CEA). As a result, the company cannot shield these contracts from state gambling laws by relying on federal derivatives regulation.

Kalshi challenged this interpretation in a 78-page petition. The company argued that it operates under the supervision of the Commodity Futures Trading Commission (CFTC). According to the petition, the ruling leaves a company that complies with federal rules exposed to civil and criminal liability.

One day earlier, on November 3, the Second Circuit Court of Appeals denied Kalshi's request for a temporary injunction that would have blocked New York and Connecticut officials from applying their gambling laws to sports event contracts. The core of the dispute is whether prediction market contracts are subject only to federal oversight, or whether states can also regulate them as gambling products.