KalshiEX, LLC v. Assad (below: KalshiEX LLC v. Hendrick)

Overview

Nevada’s federal track, and now the most consequential loss in the industry. Kalshi won a preliminary injunction against Nevada in April 2025, then the same judge dissolved it in November 2025. On August 28, 2026 the Ninth Circuit affirmed that dissolution in a published opinion (R. Nelson, Bade, Lee; opinion by Judge R. Nelson, concurrence by Judge Lee), holding that Kalshi’s sports event contracts are likely not “swaps” under the Commodity Exchange Act because they are sports bets, and that the CEA therefore likely does not preempt Nevada’s gaming laws as applied to them. The panel also declined to defer to the CFTC’s contrary definition of “gaming,” citing Loper Bright.

The opinion quotes Kalshi’s own 2024 brief to the D.C. Circuit back at it — that “the classic example” of gaming “is a contract on the outcome of a sporting event” — and answers: “We agree.” Election contracts were not decided; the panel remanded for the district court to consider Nevada’s challenge to those in the first instance.

Read the split precisely. This is not a circuit split about preemption in general — the Ninth Circuit expressly agreed with the Third Circuit in Flaherty that the CEA is a comprehensive scheme that preempts state law regulating futures trading. The disagreement is narrower and more decisive: whether Kalshi’s sports contracts are the kind of instrument the CEA covers at all. Note also the posture — this is abuse-of-discretion review of a preliminary-injunction ruling, not a final merits judgment. It runs alongside the separate state-court geofencing matter.

Changes

Logged September 22, 2026

• FilingSeptember 9, 2026

  Kalshi asked the Ninth Circuit to rehear Assad, by the panel or en banc. The petition holds the mandate, so the remand on election contracts and the stayed Arizona appeal both wait on it. Paradigm Operations and the Coalition for Prediction Markets filed amicus briefs in support.

  CourtListener — No. 25-7516 (9th Cir.)

Timeline

What's next: Kalshi petitioned for panel rehearing and rehearing en banc on September 9, 2026, supported by amicus briefs from Paradigm Operations and the Coalition for Prediction Markets. While the petition is pending the mandate does not issue, so the remand to Judge Gordon on election contracts, and the lifting of the stay on Kalshi’s Arizona appeal (No. 26-2978), both wait on it. Montana has agreed not to enforce until it is resolved.

Parties