Caption

Case

KalshiEX, LLC v. Assad, No. 25-7516 (the “Opinion”); short form “Kalshi v. Assad”

Court

United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit”); panel of Ryan D. Nelson, Bridget S. Bade, and Kenneth K. Lee, Circuit Judges; appeal from the District of Nevada, No. 2:25-cv-00575-APG-BNW, Andrew P. Gordon, District Judge

Decided

August 28, 2026 (argued April 16, 2026, San Francisco, consolidated for argument with No. 25-7187 (Crypto.com) and No. 25-7831 (Robinhood Derivatives))

Citation

No. 25-7516, slip op. (9th Cir. Aug. 28, 2026); no reporter citation yet

Author

Judge R. Nelson, joined by Judge Bade; Judge Lee concurring (styled “concurring,” not “concurring in the judgment”; the Opinion does not state whether he joined the majority opinion in full)

Vote

3 to 0 on the judgment; the Nelson opinion is a majority opinion on every issue (Nelson and Bade); Judge Lee writes that he “largely agree[s]” with the textual analysis, agrees with the reading of “event” and “associated with,” and treats 17 C.F.R. § 40.11 as controlling, but declines to resolve whether the statute itself categorically bars gaming contracts (slip op. 48 to 50)

Status

published (“FOR PUBLICATION”); panel opinion; interlocutory (28 U.S.C. § 1292(a)(1) appeal from an order dissolving a preliminary injunction); two unpublished companion memoranda filed the same day apply the Opinion: N. Am. Derivatives Exch., Inc. v. Nevada, No. 25-7187 (affirming the denial of Crypto.com’s motions for a preliminary injunction and for judgment on the pleadings) and Robinhood Derivatives, LLC v. Dreitzer, No. 25-7831 (affirming the denial of Robinhood’s temporary restraining order (a “TRO”))

Subsequent history

none; the Opinion was filed today. Checked August 28, 2026. Rehearing or en banc petition due September 11, 2026 (FRAP 40(d)(1), 14 days; the CFTC appeared only as amicus, so the 45 day period for cases with a federal party does not apply); mandate issues 7 days after that window closes absent a petition (FRAP 41(b)); certiorari petition due November 26, 2026, or 90 days after denial of rehearing (Sup. Ct. R. 13.1, 13.3)

The case in one paragraph

KalshiEX, LLC (“Kalshi”), a designated contract market (“DCM”) registered with the Commodity Futures Trading Commission (the “CFTC”), self-certified sports event contracts in January 2025 and marketed itself as “the first app for legal sports betting in all 50 states” (slip op. 13 to 14). The Nevada Gaming Control Board (the “Board”) sent a cease and desist letter in March 2025 treating the contracts as an unlicensed sports pool under Nevada gaming law, and Kalshi sued the Board, its members, the State, and the Attorney General (collectively “Nevada”) for an injunction on the theory that the Commodity Exchange Act (the “CEA”) preempts state gaming law as to swaps traded on a DCM (slip op. 14). Judge Gordon granted a preliminary injunction in April 2025, then dissolved it after ruling against Crypto.com on the same question (slip op. 14 to 17). The Ninth Circuit affirmed the dissolution as to sports event contracts: Kalshi did not show a likelihood that the CEA preempts Nevada’s gaming laws, because its sports event contracts are likely not “swaps” under 7 U.S.C. § 1a(47)(A)(ii), and in any event the CFTC’s own rule, 17 C.F.R. § 40.11(a), currently bars a DCM from listing contracts that relate to gaming (slip op. 10, 41, 47). The panel remanded for the district court to address Kalshi’s election contracts in the first instance (slip op. 41 n.7, 47). The decision splits directly with the Third Circuit’s KalshiEX, LLC v. Flaherty, 172 F.4th 220 (3d Cir. 2026).

The key point

• In the Ninth Circuit, DCM registration and self-certification no longer shield sports event contracts from state gaming law. The contracts are likely not swaps (Issue 4), so the CEA’s express preemption of state regulation of swaps traded on a DCM never attaches (Issues 2 and 3), and neither conflict nor field preemption fills the gap (Issues 7 and 8).
• 17 C.F.R. § 40.11(a) is a mandatory listing prohibition (“shall not list”) for contracts that involve, relate to, or reference gaming. A self-certified listing that violates it is unlawful under the CEA scheme regardless of CFTC nonenforcement, and the CFTC’s June 2026 proposed rule changes nothing until a final rule issues (Issue 5).
• Whether a contract is a swap is a question for the courts, decided without deference to the CFTC; a state need not sue the CFTC under the Administrative Procedure Act (the “APA”) before enforcing its own gaming law (Issue 1).
• Election contracts are open on remand (Issue 4, not decided), Judge Lee’s concurrence leaves the statutory question open for “some unique sports events” if § 40.11 is amended, and the split with Flaherty makes Supreme Court review likely; New Jersey has already signaled a certiorari petition in Flaherty.

Facts

As stated in the Opinion on the preliminary injunction record (findings are provisional):

• Kalshi is a CFTC registered DCM. In January 2025 it self-certified under 7 U.S.C. § 7a-2(c)(1) and began listing sports event contracts (slip op. 13).
  • contracts cover nearly anything related to a sporting event: game winners, first draft pick, the song opening the halftime show, and functional prop bets, point spreads, score specific outcomes, and parlays (“combos”) (slip op. 14)
  • over 90% of Kalshi’s 2025 trades, representing 95% of revenue, were sports related (slip op. 14)
  • Kalshi’s CFTC filings describe the contracts as “based on the outcome of recurrent event” (slip op. 24 n.3)
  • Kalshi Trading, Kalshi’s affiliate, “acts as a ‘significant player on the exchange,’ largely as a market maker”; Kalshi removed the reference from its website after Nevada’s brief cited it (slip op. 29 n.5)
  • Kalshi lists contracts on table tennis matches (slip op. 31)
• In March 2025 the Board demanded that Kalshi stop offering election and sports event contracts, concluding the sports contracts were “a system or method of wagering on sporting events and other events” and that Kalshi was “operating as an unlicensed sports pool” in violation of Nev. Rev. Stat. §§ 463.160(1) and 463.245(2), with civil or criminal enforcement threatened (slip op. 14).
• The CFTC never invoked the 90 day review under 17 C.F.R. § 40.11(c) or issued an order approving the contracts (CFTC Ltr. No. 25-36 (Sept. 30, 2025)) (slip op. 35). That letter cautioned DCMs that state regulatory actions and litigation “should be accounted for with appropriate contingency planning” including “close-out policies” (slip op. 46).
• Nevada’s regulated entities use geofencing (slip op. 43).
• Kalshi has offered election contracts since June 2023; they are illegal under Nevada law and a fraction of Kalshi’s business (slip op. 13 n.1, 41 n.7).
• Kalshi told the D.C. Circuit in 2024 that “gaming” in the Special Rule (7 U.S.C. § 7a-2(c)(5)(C), which lets the CFTC determine that contracts involving gaming and other listed activities are contrary to the public interest and may not be listed) “refers to playing games or playing games for stakes” and that “[t]he classic example is a contract on the outcome of a sporting event” (slip op. 37).

Procedural posture

• D. Nev. (Gordon, J.), KalshiEX, LLC v. Hendrick, 2025 WL 1073495 (Apr. 9, 2025) (“Hendrick I”): preliminary injunction granted on an expedited schedule (slip op. 14).
• D. Nev. (Gordon, J.), N. Am. Derivatives Exch., Inc. v. Nevada, 815 F. Supp. 3d 1169 (Oct. 14, 2025): preliminary injunction denied to Crypto.com; courts may decide what is a swap; sports event contracts turn on the outcome of an event, not the occurrence of one; a broad reading has no limiting principle and would hide an elephant in a mousehole (slip op. 15 to 16).
• D. Nev. (Gordon, J.), KalshiEX v. Hendrick, 817 F. Supp. 3d 1014 (“Hendrick II”): on Nevada’s motion, the injunction was dissolved on the Crypto.com reasoning; no APA claim required; “associated with” requires an inherent connection to a financial consequence; the contracts are not futures either; the remaining injunction factors favor Nevada (slip op. 16 to 17).
• Parallel decisions the panel catalogued (slip op. 14 to 15, 17 n.2): D.N.J. Flaherty (injunction granted), aff’d, 172 F.4th 220 (3d Cir. 2026); D. Md. Martin, 793 F. Supp. 3d 667 (injunction denied), appeal pending, No. 25-1892 (4th Cir.); M.D. Tenn. Orgel (Tennessee enjoined); S.D. Ohio Schuler (denied); D. Ariz. Johnson (Arizona enjoined), appeal docketed, No. 26-2978 (9th Cir. May 11, 2026); S.D.N.Y. Williams (denied).
• This opinion: Kalshi’s appeal under 28 U.S.C. § 1292(a)(1) from the Hendrick II dissolution order; federal question jurisdiction under § 1331 because the action arises under the Supremacy Clause (slip op. 17).
• Standard of review: abuse of discretion; a district court abuses its discretion if it commits legal error (Tracer Rsch. Corp. v. Nat’l Env’t Servs. Co., 42 F.3d 1292, 1294 (9th Cir. 1994); NetChoice, LLC v. Bonta, 152 F.4th 1002, 1012 (9th Cir. 2025)) (slip op. 17 to 18). The preemption question was treated as a question of law decided by the panel itself; the irreparable harm, equities, and public interest rulings were reviewed deferentially (slip op. 18, 45).

Issues and holdings

Issue 1 Whether a federal court, in a preemption suit brought by a DCM against a state gaming regulator, may decide for itself whether the DCM’s contracts are “swaps” under § 1a(47)(A)(ii), or whether the state must first challenge the CFTC’s treatment of the contracts under the APA. held the court decides; no APA claim is required; unanimous (slip op. 18 to 20)

• rule applied: a party may not use a collateral proceeding to evade APA review of final agency action (Big Lagoon Rancheria v. California, 789 F.3d 947, 953 (9th Cir. 2015) (en banc)); preemption questions are resolved with the ordinary tools of statutory interpretation (Virginia Uranium, Inc. v. Warren, 587 U.S. 761, 767 (2019); Loper Bright Enters. v. Raimondo, 603 U.S. 369, 401 (2024)) (slip op. 18 to 19)
• reasoning:
  • Nevada is not attacking any CFTC action or inaction; Kalshi self-certified under § 7a-2(c)(1), so there is no agency determination to set aside or compel under 5 U.S.C. § 706 (slip op. 19)
  • the cease and desist letter alleges no CEA violation; Nevada enforces its own law on what counts as a bet or wager, not the CFTC’s view of what is a swap (slip op. 19)
  • Kalshi uses the CEA “as a sword, rather than a shield,” which invites the court “to say what the law is” (slip op. 19)
  • the CFTC, as amicus, agrees courts can determine what constitutes a swap (slip op. 20)
• arguments rejected:
  • the Big Lagoon analogy, because there the Bureau of Indian Affairs had issued a final trust decision that California attacked collaterally; here there is no agency decision (slip op. 18 to 19)
• not decided: nothing expressly reserved. The Opinion does not address whether a CFTC order approving a contract under § 40.11(c) would change the analysis; see Part 2, open questions.

Issue 2 Whether § 2(a)(1)(A) of the CEA is an express preemption provision, assessed without a presumption against preemption. stated, not necessary to the affirmance yes; § 2 expressly preempts state regulation of swaps “traded or executed” on a DCM, and the panel applied no presumption against preemption; unanimous (slip op. 20 to 22)

• rule applied: express preemption arises when statutory text manifests intent to displace state law (Ass’n des Éleveurs de Canards et d’Oies du Quebec v. Bonta, 33 F.4th 1107, 1114 (9th Cir. 2022)); courts “focus on the plain wording of the clause” without a presumptive thumb on the scale (Puerto Rico v. Franklin Cal. Tax-Free Trust, 579 U.S. 115, 125 (2016); Cal. Rest. Ass’n v. City of Berkeley, 89 F.4th 1094, 1101 (9th Cir. 2024)) (slip op. 20 to 21)
• reasoning:
  • “exclusive” jurisdiction denies jurisdiction to all others, not only the SEC (Mississippi v. Louisiana, 506 U.S. 73, 77 to 78 (1992)), notwithstanding the account of the provision’s purpose in Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U.S. 353, 386 (1982) (slip op. 21)
  • the saving clause’s opening words, “[e]xcept as hereinabove provided,” would be superfluous if the exclusive jurisdiction sentence had no preemptive effect (slip op. 21 to 22)
  • Congress used more explicit language in 7 U.S.C. § 16(e)(2) (superseding “any State or local law that prohibits or regulates gaming or the operation of bucket shops”), but no magic words are required (slip op. 22)
• arguments rejected:
  • Nevada’s invitation to apply the presumption against preemption, which would have made “a much easier case”; the panel followed California Restaurant instead (slip op. 20 to 21)
• classification note: under the necessity test this is dicta, because the affirmance would stand if § 2 were not preemptive at all. It is a deliberate, reasoned conclusion resolved against the prevailing party, and California Restaurant already binds on the presumption point, so a later panel will treat it as settled.

Issue 3 Whether the CFTC’s exclusive jurisdiction under § 2(a)(1)(A) extends to every transaction on a DCM. held no; it reaches only the enumerated transactions (swaps and the other listed categories) that are “traded or executed” on a DCM; unanimous (slip op. 22 to 23)

• rule applied: the text of § 2(a)(1)(A), which conditions exclusive jurisdiction on both the type of transaction and the venue (slip op. 23)
• reasoning:
  • spot contracts trade on DCMs without falling within the exclusive jurisdiction grant, as the CFTC’s December 2025 listed spot crypto announcement illustrates (slip op. 22 to 23)
  • there is no dispute the contracts trade on a DCM, so “the dispositive issue is whether the sports event contracts are ‘swaps’” (slip op. 23)
  • legislative history is disregarded; the panel “focus[es] instead on the text” (slip op. 23)
• arguments rejected:
  • Kalshi’s inference from the saving clause that “state law is superseded as to [all] on-DCM transactions” (slip op. 22)
• not decided: nothing reserved on this issue

Issue 4 Whether Kalshi’s sports event contracts, whose payouts turn on game results, spreads, scores, and multi leg outcomes, are “swaps” under § 1a(47)(A)(ii). held likely not, on this record; unanimous on the result and on the core reading of “event” and “associated with” (Judge Lee concurring) (slip op. 23 to 33, 37 to 41; conclusion at 41)

• rule applied: § 1a(47)(A)(ii) defines a swap as “any agreement, contract, or transaction . . . that provides for any purchase, sale, payment, or delivery . . . that is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence” (slip op. 23); read for ordinary meaning in statutory context (Vericool World, LLC v. Igloo Prods. Corp., 175 F.4th 1045, 1057 (9th Cir. 2026); Epic Sys. Corp. v. Lewis, 584 U.S. 497, 523 (2018)); other statutes on the same subject inform meaning (FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000)); Congress does not alter regulatory schemes in vague or ancillary terms (Whitman v. Am. Trucking Ass’n, 531 U.S. 457, 468 (2001)); extraordinary grants of regulatory authority require clear authorization (West Virginia v. EPA, 597 U.S. 697, 723 (2022))
• reasoning:
  • text: “event” and “occurrence” both appear in the definition and must carry independent meaning (Yates v. United States, 574 U.S. 528, 546 (2015)); “event” as a synonym for “outcome” is an archaic or rare usage; no one calls a Dodgers World Series win an “event” (slip op. 24 to 25)
  • context: Congress has legislated on gambling “repeatedly, deliberately, and specifically” (the Professional and Amateur Sports Protection Act, the Indian Gaming Regulatory Act, and the Wire Act); reading a Wall Street reform bill to upend that scheme would hide an elephant in a mousehole (slip op. 26 to 27); the Unlawful Internet Gambling Enforcement Act (“UIGEA”) excludes DCM transactions from its own definition of wager, but that does not change the ordinary meaning of wager elsewhere, because UIGEA disclaims altering other laws, 31 U.S.C. § 5361(b) (slip op. 26 to 27 n.4)
  • substance: the contracts meet Black’s definitions of “wager” and “gambling contract”; a customer betting on the Raiders to cover 7.5 points at Caesars and a customer buying the same contract on Kalshi are doing the same thing; “everyone, including Kalshi, knows it when they see it”; a rose by any other name (slip op. 27 to 28)
  • the company the words keep: the other subparts of § 1a(47)(A) describe exchanges of payments on rates, currencies, securities, indices, and other financial measures, and swaps transfer or hedge financial risk (Thrifty Oil Co. v. Bank of Am., 322 F.3d 1039 (9th Cir. 2003)); Kalshi’s contracts “create risk, largely for ordinary consumers, where none previously existed” (slip op. 28 to 29)
  • Kalshi’s structural distinctions from a sportsbook (no counterparty, no odds setting, no profit from customer losses) have no connection to the statutory definition, which excludes contracts only by reference to specified governmental counterparties, § 1a(47)(B)(ix); the “not a market maker” premise is “tenuous” given Kalshi Trading (slip op. 29 to 30 & n.5)
  • no limiting principle: if these contracts are swaps, § 2(e) makes every person placing an off exchange sports bet a CEA violator; table tennis contracts show the reach; Flaherty’s answer, that the CFTC can regulate such contracts out after the fact, presupposes that the statutory definition already includes bets on “bingo games” and “pingpong matches,” which the panel rejects (slip op. 30 to 31)
  • “associated with a potential financial, economic, or commercial consequence” means the event must be “inherently associated” with such a consequence, not merely have downstream effects on sponsors, networks, or communities; the plain meaning of “associate” and United States v. Lopez, 514 U.S. 549, 565 (1995) support the district court’s reading; weather and emissions swaps are unlike bets on who wins a game (slip op. 31 to 33)
  • major questions: Kalshi’s reading has “a colorable textual basis” but no clear congressional authorization; Congress can regulate sports gambling directly (Murphy v. NCAA, 584 U.S. 453, 486 (2018)) and has not done so through the CFTC, which “is not a national gambling regulator”; gambling regulation sits within state and tribal police power (Ah Sin v. Wittman, 198 U.S. 500, 505 to 06 (1905); Artichoke Joe’s Cal. Grand Casino v. Norton, 353 F.3d 712, 737, 740 (9th Cir. 2003); 15 U.S.C. § 3001(a)(1)); Americans wagered almost $150 billion on sports in 2024; Congress “did not take a wrecking ball” to that scheme when it defined swap (slip op. 37 to 41)
• arguments rejected:
  • dictionary maximalism (the Third Circuit majority’s approach in Flaherty), because isolated definitions contribute little to ordinary meaning in context (slip op. 24)
  • the UIGEA cross reference (slip op. 26 to 27 n.4)
  • the “not the house” distinctions (slip op. 29 to 30)
  • the economic consequence catch all, because it would render the definition “so broad as to be meaningless” (slip op. 32 to 33)
  • legislative history on both sides (slip op. 23)
• not decided:
  • whether Kalshi’s election contracts fit the swap definition; remanded for the district court to consider in the first instance (slip op. 41 n.7)
  • whether any sports related contract could satisfy § 1a(47)(A)(ii); Judge Lee suggests “perhaps some unique sports events can be part of a swap trade if they meet the statutory requirements” (slip op. 49); the majority does not address it
  • the conclusion is framed as likelihood of success on the preliminary injunction record (“these sports event contracts are likely not swaps under the CEA”) (slip op. 41)

Issue 5 Whether the Special Rule, § 7a-2(c)(5)(C), shows that Congress assigned to the CFTC alone the public interest determination for gaming related contracts, so that CFTC inaction leaves DCM listed gaming contracts lawful and preemptive. held no; Kalshi’s self-certification and listing are unlawful under 17 C.F.R. § 40.11(a), which mandatorily prohibits listing contracts that involve, relate to, or reference gaming, and the CFTC never displaced that prohibition by invoking § 40.11(c) review; unanimous on the § 40.11 ground; Judge Lee writes separately that the statute itself may not categorically bar gaming contracts (slip op. 33 to 37; Lee at 49 to 50)

• rule applied: a registered entity may self-certify a new contract only by certifying that it “complies with this chapter (including regulations under this chapter),” § 7a-2(c)(1) (slip op. 33); § 40.11(a) provides that a registered entity “shall not list for trading” a contract based on an excluded commodity that “involves, relates to, or references . . . gaming”; “shall” is mandatory (In re Thrift Shoe Co., 502 F.2d 1211, 1213 (9th Cir. 1974); Lexecon Inc. v. Milberg Weiss, 523 U.S. 26, 35 (1998)) (slip op. 34 to 35); the CFTC’s contrary reading of its statute and of “gaming” receives no deference (Loper Bright, 603 U.S. at 385, 401) (slip op. 35, 37); proposed regulations have no legal effect (Ctr. for Food Safety v. Vilsack, 718 F.3d 829, 843 (9th Cir. 2013)) (slip op. 36)
• reasoning:
  • the 2011 adopting release explains that the prohibition exists to “prevent gambling through the futures markets,” 76 Fed. Reg. 44776, 44786 (slip op. 34)
  • § 40.11(c)’s discretionary 90 day review is in addition to § 40.11(a)’s prohibition; the CFTC never invoked it or approved the contracts, so the prohibition “remains in effect” (slip op. 35)
  • the Third Circuit “essentially disregarded” § 40.11 when it relied on the CFTC’s failure to review or prohibit sports contracts; the absence of review “proves our point” (slip op. 35)
  • the CFTC’s notice of proposed rulemaking (the “NPRM”) “reaffirms our view on the regulation as currently written”; until § 40.11(a) is amended, “it bars Kalshi’s gaming-related contracts from being listed on a DCM” (slip op. 35 to 36)
  • the Special Rule gives the CFTC no more preemptive authority over gaming than over terrorism or assassination: if Kalshi self-certified a life insurance contract in violation of the CFTC’s own interpretation and the CFTC failed to remove it, no one would say the states and other federal agencies were preempted (slip op. 36)
  • “under any reasonable interpretation, Kalshi’s sports event contracts relate to gaming”; Kalshi’s own 2024 D.C. Circuit brief said a contract on the outcome of a sporting event is “[t]he classic example” of gaming and that “Congress did not want sports betting to be conducted on derivatives markets” (slip op. 37)
• arguments rejected:
  • the reading, advanced by Kalshi and now the CFTC, that the Special Rule permits listing gaming, terrorism, and assassination contracts unless and until the CFTC acts to remove them (slip op. 34 to 35)
  • that sports event contracts do not involve gaming (slip op. 34, 36 to 37)
  • reliance on the pending NPRM as supplemental authority (slip op. 35 to 36)
• not decided:
  • whether the statute, apart from § 40.11, categorically bars gaming contracts, or instead gives the CFTC discretion to permit some; Judge Lee raises the question and says it “need not [be] resolve[d] . . . right now because 17 C.F.R. § 40.11 bars gaming contracts” (slip op. 49 to 50)
  • what “gaming” means at its edges; the panel decided only that these contracts relate to gaming under any reasonable interpretation (slip op. 37)

Issue 6 Whether the contracts are futures or options in “excluded commodities” within the CFTC’s exclusive jurisdiction. held no, on two alternative grounds; unanimous (slip op. 41 to 42)

• rule applied: § 1a(19)(iv) defines excluded commodities to include occurrences “associated with a financial, commercial, or economic consequence” (no “potential”); § 2(a)(1)(A) lists the transactions subject to exclusive jurisdiction (slip op. 41 to 42)
• reasoning:
  • excluded commodities are not listed in § 2(a)(1)(A)’s grant, and Kalshi’s argument that they are a subset of “commodity” does “not grammatically or logically make sense” (agreeing with Hendrick II, 817 F. Supp. 3d at 1034) (slip op. 41)
  • even if they were covered, § 1a(19)(iv)(II) sets “an even higher standard than the swap definition,” and the contracts do not clear it for the reasons given in Issue 4 (slip op. 42)
• arguments rejected: the subset reading (slip op. 41)
• not decided: nothing reserved. The companion Crypto.com memorandum separately rejected an “options” theory under § 1a(36) and CFTC v. White Pine Trust Corp., 574 F.3d 1219, 1226 (9th Cir. 2009), noting Crypto.com had self-certified its contracts as swaps, not options (No. 25-7187, mem. at 3 to 4; unpublished)

Issue 7 Whether Nevada’s gaming laws are conflict preempted (impossibility or obstacle). held no conflict preemption shown “[o]n this record”; unanimous (slip op. 42 to 43)

• rule applied: impossibility preemption requires that a private party cannot comply with both state and federal law (Canards, 33 F.4th at 1114); more protective state law is not, by itself, a conflict (Wyeth v. Levine, 555 U.S. 555, 573 (2009)) (slip op. 42 to 43)
• reasoning:
  • Kalshi never explained why withdrawing sports contracts from Nevada would violate the impartial access core principle, 17 C.F.R. § 38.151(b); its argument was “a false, all-or-nothing proposition” (slip op. 42 to 43)
  • Nevada licensees geofence; Kalshi “could do the same; it just refuses to do so and instead seeks a competitive advantage over its competitors” (slip op. 43)
  • the district court found no evidence that the CFTC would act against a DCM that complied with state law during the litigation (slip op. 43)
  • the Special Rule’s reference to activity “unlawful under . . . state law” confirms that Congress expected state law to operate alongside the CEA (following Martin, 793 F. Supp. 3d 667) (slip op. 43)
• arguments rejected: impossibility via the impartial access principle; obstacle preemption from other asserted differences between the CEA and state law (slip op. 42 to 43)
• not decided: whether a record showing CFTC action against a complying DCM would produce a different result; the holding is expressly limited to this record (slip op. 43)

Issue 8 Whether the CEA field preempts Nevada’s gaming laws. held no; the CEA occupies the field of regulating swaps and futures traded on a DCM, but Nevada’s laws target gaming, a field Congress has left to the states; unanimous (slip op. 44 to 45)

• rule applied: field preemption bars state regulation in a field Congress has determined must be governed exclusively by federal law (Canards, 33 F.4th at 1114; Arizona v. United States, 567 U.S. 387, 400 (2012)); courts must not define the preempted field too broadly (Sikkelee v. Precision Airmotive Corp., 822 F.3d 680, 689 (3d Cir. 2016)) and must consider “the target at which the state law aims” (Oneok, Inc. v. Learjet, Inc., 575 U.S. 373, 385 (2015)) (slip op. 44)
• reasoning:
  • the panel agrees with Flaherty that the CEA is a comprehensive scheme that preempts state regulation of futures trading; a state would be both field and expressly preempted from regulating weather or interest rate swaps (slip op. 44)
  • the Nevada provisions in the cease and desist letter (Nev. Rev. Stat. §§ 463.160(1)(a), (4); 463.245(2); 465.086; 465.092) regulate gaming, including unlicensed sports pools accepting wagers on sporting events (slip op. 44)
  • Congress has expressly left gambling to the states, 15 U.S.C. § 3001(a)(1) (slip op. 44 to 45)
  • Flaherty’s field preemption holding depended on its conclusion that the contracts are swaps, which the panel rejects (slip op. 45)
• arguments rejected: that the CEA’s comprehensiveness as to DCM trading extends to state gaming regulation of contracts that are not swaps (slip op. 44 to 45)
• not decided: nothing reserved

Issue 9 Whether the district court abused its discretion in finding no irreparable harm and that the equities and public interest favor Nevada. held no abuse of discretion; unanimous (slip op. 45 to 47)

• rule applied: the movant must show likely irreparable harm and that an injunction is equitable and in the public interest (NetChoice, 152 F.4th at 1012); self-inflicted harm “severely undermines a claim for equitable relief” (Bennett v. Isagenix Int’l LLC, 118 F.4th 1120, 1129 (9th Cir. 2024)) (slip op. 45 to 46)
• reasoning:
  • geofencing and close out costs are unlikely to be too expensive “for a company of Kalshi’s size”; the remaining harms are speculative or self-inflicted, since Kalshi “greatly expanded its offerings” knowing the state law risk (slip op. 45)
  • the fear of losing DCM status is hard to credit given Kalshi’s willingness to list gaming contracts in the face of § 40.11, and the CFTC’s September 30, 2025 letter told DCMs to plan for state enforcement (slip op. 46)
  • a likely lawful state enforcement proceeding does not inflict irreparable harm (slip op. 46)
  • the public interest in preventing Supremacy Clause violations tracks the merits (United States v. California, 921 F.3d 865, 893 to 94 (9th Cir. 2019)); with no likelihood of success, the equities favor Nevada’s enforcement of its own law; comity and federalism (Bush v. Gore, 531 U.S. 98, 112 (2000) (Rehnquist, C.J., concurring)) (slip op. 46 to 47)
• arguments rejected: the “Hobson’s choice” between state compliance and DCM status (slip op. 45 to 46)
• not decided: nothing reserved

Disposition

Affirmed in part: the order dissolving the preliminary injunction stands as to Kalshi’s sports related event contracts, so nothing in federal court restrains the Board, the Nevada Gaming Commission, or their members from enforcing Nevada gaming law against those contracts (slip op. 47). Remanded in part: the district court is to consider Nevada’s challenges to Kalshi’s election contracts “consistent with this opinion,” because it never analyzed whether those contracts fit the swap definition (slip op. 41 n.7, 47). The Opinion contains no vacatur language, so on its text the dissolution order remains in effect as to election contracts pending the district court’s consideration; the Opinion does not address interim status expressly. The companion memoranda affirm the denial of Crypto.com’s preliminary injunction and its request for judgment on the pleadings (which the panel called premature at the preliminary stage) and the denial of Robinhood’s TRO (No. 25-7187, mem. at 2 to 5; No. 25-7831, mem. at 2 to 3).

Separate opinions

• Judge Lee, concurring (slip op. 48 to 50):
  • agrees with the ordinary meaning reading: few people would call “the New York Mets’ latest loss of a game” an “event,” and the outcome of one game in a 162 game season is not “associated with” a financial consequence “that one would expect in a swap contract” (slip op. 48)
  • treats the major questions doctrine as a contextual tool that narrows vague terms “from a universe of possible to a realm of probable” when major governmental action is at stake (slip op. 49)
  • his pause: the Special Rule says the CFTC “may determine” that gaming contracts are contrary to the public interest, which “appears to give the CFTC discretion whether to ban altogether gaming contracts,” so the statute “does not seem to categorically bar all gaming contracts, despite the text and contextual clues suggesting otherwise”; “perhaps some unique sports events can be part of a swap trade if they meet the statutory requirements” (slip op. 49)
  • neither party focused on the provision, Kalshi because § 40.11 bans gaming contracts and Nevada because the Special Rule “complicates the statutory analysis” (slip op. 49 to 50)
  • the question need not be resolved because § 40.11 “remains in the books and controls the outcome of this appeal” even though the CFTC has proposed revising it (slip op. 50)
  • why it matters: this is not a Marks situation (Marks v. United States, 430 U.S. 188, 193 (1977)), since Judges Nelson and Bade form a majority on every point. The concurrence matters for durability. It identifies the § 40.11 ground as the one Judge Lee treats as controlling, which means a final CFTC rule amending § 40.11 would, for at least one panel member, reopen whether some sports contracts are swaps. That is the fault line for an en banc petition, and it is the argument Kalshi will make at the Supreme Court.

Part 2: what the decision does

What changed

• Nevada enforcement against DCM sports contracts: Hendrick I (enjoined) → Hendrick II (injunction dissolved) → Ninth Circuit: dissolution affirmed; Nevada may enforce
• meaning of “swap” for event contracts in the Ninth Circuit: district courts divided → sports event contracts are likely not swaps; “event” does not mean outcome; “associated with” means inherently associated (slip op. 25, 32 to 33, 41)
• reach of § 2(a)(1)(A): Kalshi’s position that all on DCM trading is federally exclusive → exclusive jurisdiction covers only the enumerated transactions traded or executed on a DCM (slip op. 22 to 23)
• § 40.11(a): treated by the CFTC and the Third Circuit as a discretionary review framework → a mandatory listing prohibition that self-certification cannot cure and CFTC inaction does not suspend (slip op. 34 to 36)
• who decides what a swap is: Kalshi’s position that states must challenge the CFTC under the APA → courts decide in the preemption suit itself, without deference to the CFTC (slip op. 18 to 20, 35, 37)
• field preemption: Flaherty (the CEA occupies the field as to DCM traded sports contracts) → Ninth Circuit: the occupied field is swaps and futures trading; gaming is a separate field that states occupy (slip op. 44 to 45)
• circuit alignment: Third Circuit for Kalshi (Flaherty, Apr. 6, 2026) → Ninth Circuit against Kalshi; a direct split on the swap definition, on § 40.11, and on field preemption

Holding versus dicta ledger

Precedential weight

• binds: district courts in the Ninth Circuit (Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, Guam, Northern Mariana Islands) and later Ninth Circuit panels. The posture is preliminary, but the Ninth Circuit’s rule is that appellate “conclusions on pure issues of law” reached on a preliminary injunction appeal are binding, even though the preliminary injunction decision is not law of the case (Ranchers Cattlemen Action Legal Fund v. USDA, 499 F.3d 1108, 1114 (9th Cir. 2007); Gonzalez v. Arizona, 677 F.3d 383, 389 n.4 (9th Cir. 2012) (en banc)) (not cited in the Opinion). The readings of “event,” “associated with,” § 2(a)(1)(A), and § 40.11(a) are pure legal conclusions. The pending Arizona appeal, KalshiEX LLC v. Johnson, No. 26-2978 (9th Cir.), from an order enjoining Arizona, is controlled unless the panel there distinguishes it.
• persuasive: outside the Ninth Circuit; directly contrary to Flaherty (3d Cir.); aligned with Martin (D. Md.), Schuler (S.D. Ohio), and Williams (S.D.N.Y.)
• final?: no. Rehearing or en banc petition due September 11, 2026; mandate on or about September 18, 2026 absent a petition; certiorari due November 26, 2026 absent rehearing. No petition on file as of August 28, 2026 (the Opinion was filed today). New Jersey obtained an extension of time to seek certiorari in Flaherty, citing the pending Ninth and Fourth Circuit decisions (press reports of a June 26, 2026 application; not verified on the Supreme Court docket). The Fourth Circuit’s Martin appeal, No. 25-1892, remains pending.
• overtaken by: nothing as of August 28, 2026. The CFTC’s June 10, 2026 NPRM (published June 12, 2026; comments closed July 27, 2026) proposes to amend § 40.11 to replace the categorical listing prohibition with a contract specific “may determine” review and to define “gaming.” A final rule in that form removes the Issue 5 ground. It does not touch the Issue 4 holding that the contracts are not swaps, which rests on the statute, and the Opinion states both grounds independently (slip op. 10).

Related authority

• followed: Cal. Rest. Ass’n v. City of Berkeley, 89 F.4th 1094 (9th Cir. 2024), on reading express preemption clauses without a presumption; Puerto Rico v. Franklin Cal. Tax-Free Trust, 579 U.S. 115 (2016), on plain wording as the best evidence of preemptive intent; Mississippi v. Louisiana, 506 U.S. 73 (1992), on “exclusive”; N. Am. Derivatives Exch. v. Nevada, 815 F. Supp. 3d 1169 (D. Nev. 2025), and Hendrick II, 817 F. Supp. 3d 1014 (D. Nev. 2025), whose readings of “event” and “associated with” the panel adopted; Yates v. United States, 574 U.S. 528 (2015), on surplusage; FDA v. Brown & Williamson, 529 U.S. 120 (2000), and Whitman v. Am. Trucking, 531 U.S. 457 (2001), on later specific statutes and elephants in mouseholes; West Virginia v. EPA, 597 U.S. 697 (2022), on major questions; Loper Bright, 603 U.S. 369 (2024), on no deference to the CFTC; Murphy v. NCAA, 584 U.S. 453 (2018), and Flynt v. Bonta, 131 F.4th 918 (9th Cir. 2025), on state authority over sports gambling; Artichoke Joe’s, 353 F.3d 712 (9th Cir. 2003), on gambling as police power; KalshiEX LLC v. Martin, 793 F. Supp. 3d 667 (D. Md. 2025), on the Special Rule confirming coexistence of state law; Wyeth v. Levine, 555 U.S. 555 (2009), on more protective state law; Oneok v. Learjet, 575 U.S. 373 (2015), and Sikkelee, 822 F.3d 680 (3d Cir. 2016), on defining the preempted field by the state law’s target; Ctr. for Food Safety v. Vilsack, 718 F.3d 829 (9th Cir. 2013), on proposed rules having no effect; Bennett v. Isagenix, 118 F.4th 1120 (9th Cir. 2024), on self-inflicted harm; Lexecon, 523 U.S. 26 (1998), and In re Thrift Shoe, 502 F.2d 1211 (9th Cir. 1974), on “shall”
• distinguished: Big Lagoon Rancheria v. California, 789 F.3d 947 (9th Cir. 2015) (en banc), on the fact that no final CFTC action exists to attack (slip op. 18 to 19)
• disagreed with: KalshiEX, LLC v. Flaherty, 172 F.4th 220 (3d Cir. 2026), on the swap definition (dictionary maximalism; the economic consequence clause), on § 40.11, and on field preemption (slip op. 24, 31 to 32, 35, 45); the Flaherty dissent (Roth, J.) invoked on the ping pong point (slip op. 31)
• agreed with in part: Flaherty, on the CEA being a comprehensive scheme that preempts state regulation of futures trading (slip op. 44)
• used against the party: Kalshi’s 2024 brief in KalshiEx LLC v. CFTC, 119 F.4th 58 (D.C. Cir. 2024), defining gaming to include contracts on the outcome of sporting events (slip op. 37)
• agency materials: 76 Fed. Reg. 44776, 44786 (2011) (adopting release for § 40.11); 77 Fed. Reg. 48208, 48246 (2012) (insurance products not swaps); CFTC Ltr. No. 25-36 (Sept. 30, 2025) (no approval order; contingency planning); the CFTC’s June 2026 NPRM on § 40.11 (no legal effect until final); the CFTC amicus position on § 40.11 (rejected without deference)