Read the disagreement precisely, because it is narrower than it looks. The Ninth Circuit did not reject preemption. It agreed with the Third Circuit that the Commodity Exchange Act is a comprehensive scheme that preempts state law regulating futures trading, and it declined to apply any presumption against preemption. The entire divergence turns on a prior question — whether these contracts are the instruments the statute reaches at all. Both rulings are also preliminary-injunction decisions reviewed for abuse of discretion, not final judgments on the merits. The single ruling on this page that is a merits judgment came from a district court in Utah.
The Path to the Supreme Court
A 2023 order against one election market became a fight over whether federal commodities law wiped out state gambling law. Two federal appeals courts have now answered it opposite ways, and 3 petitions now ask the Supreme Court to settle it.
Last updated September 25, 2026. Informational, not legal advice.
Two courts, opposite answers
Third Circuit · argued Sept 10, 2025 · decided Apr 6, 2026
Chagares, C.J., Porter & Roth, JJ. — opinion by Porter, Roth, J. dissenting
Sports contracts are swaps.
The statute only asks that an event be “associated with” a financial consequence — sponsors, networks, and franchises supply that. Injunction affirmed, 2–1, for the platforms.
Ninth Circuit · argued Apr 16, 2026 · decided Aug 28, 2026
R. Nelson, Bade & Lee, JJ. — opinion by R. Nelson, Lee, J. concurring
Sports contracts are not swaps.
They were sports bets — and a CFTC regulation already bars gaming contracts outright. Affirmed on sports contracts; Kalshi’s election contracts remanded, not decided.
Amici against Kalshi: 39 states and D.C., the American Gaming Association, Better Markets, and two problem-gambling organizations.
The Ninth Circuit’s opinion opens by quoting Kalshi’s own marketing: it “advertises itself as ‘the first app for legal sports betting in all 50 states.’”
Where it stands
Ruling for the platforms
Ruling for the states
Decided nothing
Still open
“Whether the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act preempted States from regulating sports bets that occur within their jurisdictions if those bets are offered on markets registered with the Commodity Futures Trading Commission.”
Question presented — Petition for a writ of certiorari, Flaherty v. KalshiEX, LLC, No. 26-299, filed September 2, 2026; Kalshi’s response due November 9, 2026.
How it got here
- September 2023. The CFTC orders Kalshi not to list contracts on control of Congress.
- September 2024. The U.S. District Court for D.C. (Judge Cobb) vacates that order — a win for the platform.
- May 2025. The CFTC voluntarily dismisses its own appeal. No appellate ruling on the order was ever issued.
- April 6, 2026. The Third Circuit, in Flaherty (172 F.4th 220), affirms the injunction for the platform, 2–1, Judge Roth dissenting.
- August 28, 2026. The Ninth Circuit, in Assad (No. 25-7516, published), affirms dissolution of the injunction against the platform on sports contracts, and remands the election-contract question.
- September 2, 2026. New Jersey petitions the Supreme Court for certiorari in Flaherty v. KalshiEX, LLC, No. 26-299 — review of the Third Circuit, for the platform. Response due November 9, 2026.
- September 10, 2026. Robinhood petitions the Supreme Court for certiorari in Robinhood Derivatives, LLC v. Dreitzer, No. 26-338 — review of the Ninth Circuit, against the platform. Response due October 14, 2026.
- September 11, 2026. Crypto.com petitions the Supreme Court for certiorari in North American Derivatives Exchange, Inc. v. Nevada, No. 26-344 — review of the Ninth Circuit, against the platform. Response due October 15, 2026.
- Running in parallel, 6 more circuit appeals are undecided: the Second Circuit (Kalshi’s New York and Connecticut appeals (Nos. 26-1835 and 26-2239); the two injunction motions go to one panel, heard in tandem. Undecided.); the Fourth Circuit (Maryland, argued May 7, 2026 and undecided; both sides have filed letters over every ruling since, the latest on September 21. Kalshi lost below.); the Sixth Circuit (Tennessee and Ohio consolidated and argued July 30, 2026 — a pro-platform case against an anti-platform one. Undecided. Three Michigan appeals are being briefed behind it.); the Seventh Circuit (Three appeals from the Wisconsin order, consolidated; appellants’ briefs were due September 21, 2026. Kalshi separately asked on September 21 to appeal the Ho-Chunk Nation’s IGRA ruling (No. 26-8020).); the Eighth Circuit (Iowa: Kalshi appealed the September 8 denial of its injunction (No. 26-2874). Its opening brief is due November 6, 2026. The first time the question has reached this circuit.); the Tenth Circuit (Utah: the only appeal from a final judgment (No. 26-4100). The court refused an injunction pending appeal on September 8, 2026, so Utah may enforce while it runs.)
The two rulings that made the split
KalshiEX LLC v. Flaherty
Third Circuit · April 6, 2026 · 2-1, Roth, J. dissenting · 172 F.4th 220
Affirmed an injunction barring New Jersey from enforcing its gambling laws. The outcome of a sports event, the majority held, “certainly can be associated with a potential financial, economic, or commercial consequence” — and the analysis “need not go further.”
District case: D.N.J. No. 1:25-cv-02152, Judge Edward S. Kiel · 70 docket entries
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Mar 27, 2025
New Jersey issues a cease-and-desist letter, later filed as Exhibit 1 to the complaint.
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Mar 28, 2025
Complaint (ECF 1, entered on the docket the following day) and a motion for a TRO and preliminary injunction (ECF 2) filed against seven defendants, including the Casino Control Commission, the Division of Gaming Enforcement, Attorney General Matthew Platkin, and Mary Jo Flaherty. Kalshi’s counsel includes Gurbir Grewal — New Jersey’s own former attorney general — with Neal K. Katyal appearing pro hac vice.
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Apr 18–24, 2025
New Jersey opposes the injunction (ECF 15); Kalshi replies (ECF 17). The Casino Association of New Jersey moves for leave to appear as amicus (ECF 18), granted May 6 (ECF 23).
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Apr 28, 2025
Preliminary injunction granted (ECF 21/22), barring New Jersey from civil or criminal enforcement against Kalshi’s sports event contracts, on a $100,000 bond.
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May 8, 2025
New Jersey appeals (ECF 26). The same day, Kalshi voluntarily dismisses five of the seven defendants (ECF 25) — why the caption narrowed to Flaherty.
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May 21, 2025
The district case is stayed (ECF 31) pending the Third Circuit’s mandate.
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Apr 6, 2026
Third Circuit affirms, 2–1, Judge Roth dissenting.
KalshiEX, LLC v. Assad
Ninth Circuit · August 28, 2026 · published · No. 25-7516
Affirmed dissolution of Kalshi’s Nevada injunction as to sports contracts, holding them likely not “swaps” and in any event related to “gaming.” The election-contract question was remanded, not decided.
District case (filed as Hendrick): D. Nev. No. 2:25-cv-00575, Chief Judge Andrew P. Gordon · 350 docket entries
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Mar 28, 2025
Complaint filed (ECF 1) — the same day as the New Jersey complaint, with the same pro hac vice team (Katyal, Sterling, Havemann, Austin). A deliberate two-forum filing.
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Mar 31–Apr 1, 2025
Two judges recuse in succession — Jennifer A. Dorsey (ECF 21), then Gloria M. Navarro (ECF 24) — before the case lands with Chief Judge Gordon.
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Apr 8–9, 2025
Preliminary injunction granted in part from the bench at the TRO hearing, the State’s countermotion denied, on a $10,000 bond — one tenth of New Jersey’s. A written order follows April 9 (ECF 45), enjoining the Nevada Gaming Control Board and Gaming Commission from enforcing preempted state law.
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Apr 23, 2025
The State moves to dismiss (ECF 50).
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May 14, 2025
The Nevada Resort Association moves to intervene (ECF 57); its interested-parties filing (ECF 141) lists roughly 70 casinos, including Wynn, MGM, Caesars, Bellagio, Venetian, and Resorts World.
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Oct 17, 2025
The State files an emergency motion to dissolve the injunction (ECF 142), with 45 exhibits, most under seal.
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Nov 14, 2025
Hearing on the motion to dissolve (ECF 220). Nevada is represented by Nicole Saharsky, a leading Supreme Court advocate; nine separate non-party remote-access requests are granted. Taken under advisement.
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Nov 24, 2025
Preliminary injunction dissolved (ECF 237). The same day, the parties file a Joint Notice Concerning Non-Enforcement Pending Appeal (ECF 236) — Kalshi kept operating in Nevada despite losing the injunction.
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Nov 25, 2025
Kalshi appeals (ECF 241) and moves for an emergency stay (ECF 238).
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Aug 28, 2026
Ninth Circuit affirms the dissolution.
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Still live
The district case did not end. Fact discovery closes October 30, 2026; expert discovery closes January 22, 2027 (ECF 302).
The laws in play
Congress first regulated futures in the Grain Futures Act of 1922, after regulators found the markets “susceptible to speculation, manipulation, and control” (Bd. of Trade of Chicago v. Olsen, 262 U.S. 1, 37 (1923)). Renamed the Commodity Exchange Act (CEA) in 1936, its 1974 amendments created the CFTC and gave it “exclusive jurisdiction,” codified at 7 U.S.C. § 2. Dodd-Frank added “swaps” to that jurisdiction in 2010 and wrote in the Special Rule the two circuits now read differently.
| Provision | What it does |
|---|---|
| 7 U.S.C. § 1a(47)(A)(ii) | Defines “swap” — needs only an event “associated with a potential financial, economic, or commercial consequence.” This is the crux of the split. |
| 7 U.S.C. § 2(a)(1)(A) | Gives the CFTC exclusive jurisdiction over swaps traded or executed on a designated contract market. |
| 7 U.S.C. § 7a-2(c)(5)(C)(i)–(ii) | The Special Rule. The CFTC may find a swap contrary to the public interest if it involves “activity that is unlawful under any Federal or State law, terrorism, assassination, war, gaming, or other similar activity.” |
| 17 C.F.R. § 40.11(a) | The CFTC’s own regulation categorically prohibiting swaps involving gaming — the rule the Ninth Circuit held Kalshi’s self-certification violated. |
| 7 U.S.C. § 16(e)(1)(B)(i) | Savings clause — the Act does not preempt state law for transactions not on a registered entity. |
| 15 U.S.C. § 8302(d)(1) | Congress’s delegation to the CFTC and SEC to “further define” swaps. |
| U.S. Const. art. VI, cl. 2 | The Supremacy Clause — the basis for any federal preemption of state gambling law. |
The states enforce their own statutes against this: New Jersey’s gambling law (N.J. Stat. Ann. §§ 5:12A-11(c), 2C:43-2 — a fourth-degree crime, fines up to $100,000) in Flaherty, and Nevada’s gaming statutes and regulations in Assad. See “The arguments, both ways” below for how the two circuits read the swap definition and the Special Rule against each other.
The arguments, both ways
Is a sports event contract a “swap”?
The platforms & the CFTC
The words do the work. A sports outcome is an “event” in ordinary usage, and the Third Circuit held the analysis stops there: the outcome of a sports event “certainly can be associated with a potential financial, economic, or commercial consequence.” Sponsors, networks, franchises and local economies all carry real exposure to it.
The states
Reading “event” to mean “outcome” makes the statute’s own use of “occurrence” surplusage, and dictionaries mark that sense as archaic. The Ninth Circuit required the event be inherently associated with a financial consequence, since any downstream consequence would “render the definition of swap so broad as to be meaningless.”
Does the reading have a limiting principle?
The platforms & the CFTC
Congress gave the CFTC power to “further define” swaps, so an agency rather than a court can police the edges. Kalshi has not asked any court to hold that ordinary sports bets are swaps.
The states
This is the sharpest point against the platforms. Section 2(e) makes it unlawful to enter a swap off a designated market — so if a sports bet is a swap, then “every person placing a sports bet at Caesar’s Sportsbook … is violating the CEA.” The Ninth Circuit noted the Third Circuit acknowledged this and did not resolve it.
What work does the Special Rule on “gaming” do?
The platforms & the CFTC
The Special Rule says the Commission may determine that a contract is contrary to the public interest — permissive, not self-executing. Judge Lee, concurring in the Ninth Circuit, agreed it “does not seem to categorically bar all gaming contracts,” and allowed that “perhaps some unique sports events can be part of a swap trade.”
The states
Kalshi told the D.C. Circuit in 2024 that “[t]he classic example is a contract on the outcome of a sporting event; as the legislative history directly confirms, Congress did not want sports betting to be conducted on derivatives markets.” The Ninth Circuit quoted that back and answered: “We agree.”
Field or conflict preemption — and do the circuits actually disagree?
The platforms & the CFTC
The Commodity Exchange Act is a comprehensive scheme, and section 2(a)(1)(A) expressly preempts state regulation of swaps traded on a designated contract market. Both circuits accept this.
The states
They accept it and it does not help, because it only bites if the contracts are swaps. The Ninth Circuit agreed with the Third on the framework and diverged one step earlier — which is why calling this a split about preemption misstates it.
Does the CFTC’s own view get deference?
The platforms & the CFTC
The Commission is the expert regulator, it registered these markets, and it appeared as amicus supporting the platforms. Its reading of its own statute should carry weight.
The states
After Loper Bright, it carries none. The Ninth Circuit said so directly: “We do not defer to the CFTC’s definition of gaming.” Courts decide what the statute means.
Who decides whether a listed contract is lawful, and when?
The platforms & the CFTC
A designated market self-certifies a new contract to the CFTC, which may review and disallow it. Until the Commission acts, the contract is lawfully listed and states cannot second-guess that federal judgement.
The states
Self-certification is not adjudication. A state enforcing its own gambling law is not attacking any CFTC action — the Ninth Circuit held Nevada was “pursuing enforcement of its own state law about what qualifies as a bet or wager, not what the CFTC considers a swap.”
What the Ninth Circuit left open
Judge Lee joined the majority in full, then wrote separately to flag the one thing it did not decide. He agreed with the textual analysis — that the “more natural reading of ‘event’” excludes a sporting result, since “[f]ew people would describe, say, the New York Mets’ latest loss of a game as an ‘event’” — and with the major-questions concern about reading abstract terms to upend “a multibillion-dollar industry historically regulated by states and Indian tribes” (Assad, slip op. 48–49).
Then: “One statutory provision, however, gives me pause.” Because the Special Rule says the Commission may determine that gaming contracts are contrary to the public interest, the statute “appears to give the CFTC discretion whether to ban altogether gaming contracts” and so “does not seem to categorically bar all gaming contracts, despite the text and contextual clues suggesting otherwise.” On that reading, “perhaps some unique sports events can be part of a swap trade if they meet the statutory requirements” (slip op. 49). The trailing condition carries the weight: the Special Rule alone would not foreclose a contract that independently satisfies the swap definition — which the majority held these contracts do not.
He declined to resolve it. “Ultimately, I do not think we need to resolve this thorny statutory interpretation question right now because 17 C.F.R. § 40.11 bars gaming contracts. While CFTC has proposed revising that regulation, it remains in the books and controls the outcome of this appeal” (slip op. 50). Neither side had pressed the point — Kalshi because the CFTC had already used the Special Rule to ban gaming contracts, Nevada because the provision “complicates the statutory analysis” (slip op. 49–50).
What it does and does not mean. One judge of three reads the statutory question underneath as genuinely unresolved, avoidable here only because of a regulation currently in flux. It does not unsettle the ruling. The Special Rule is the majority’s second, independent ground; the first — that sports event contracts are not “swaps” under 7 U.S.C. § 1a(47)(A)(ii) at all — carries no § 40.11 dependency, and it is that holding, not this one, that collides with Flaherty. As the majority put it, “[i]f these are not ‘gaming’ contracts, then the Special Rule has no relevance” (slip op. 37). Amending Reg. 40.11 would remove the alternative ground and leave the axis of the split standing.
Every step, in order
- 2023
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September 2023
The CFTC blocks Kalshi’s election contracts
Commodity Futures Trading Commission
The Commission orders Kalshi not to list contracts on which party will control Congress, invoking the Commodity Exchange Act’s special rule for contracts involving “gaming” or activity unlawful under state or federal law. Case detail →
- 2024
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September 2024
A federal judge vacates that order
U.S. District Court, District of Columbia
Judge Jia M. Cobb holds the contracts involve neither unlawful activity nor gaming, and that the agency has no free-floating public-interest veto. Election contracts have traded continuously since. Case detail →
- 2025
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May 2025
The CFTC drops its own appeal
U.S. Court of Appeals, D.C. Circuit
The Commission voluntarily dismisses by unopposed motion after a motions panel had called the merits “close and difficult.” No appellate opinion ever issues and the judgment is never vacated — so the foundational win is district-court authority that binds nobody. Case detail →
- 2026
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April 2026
The Third Circuit rules for the platform
U.S. Court of Appeals, Third Circuit
A divided panel affirms an injunction barring New Jersey from enforcing its gambling laws, holding the sports contracts likely preempted “swaps.” Judge Roth dissents. Reported at 172 F.4th 220. Case detail →
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July 2026
New York goes the other way
U.S. District Court, Southern District of New York
Judge Analisa Torres denies Kalshi an injunction and holds the Commodity Exchange Act does not preempt New York’s gambling law. Kalshi appeals to the Second Circuit the next day. Case detail →
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July 2026
The federal government itself loses
U.S. District Court, Eastern District of Wisconsin
Judge William C. Griesbach denies the United States and the CFTC a preliminary injunction against Wisconsin, and denies three motions to intervene in the same order. Three appeals follow and are consolidated in the Seventh Circuit. Case detail →
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August 2026
Utah wins outright — the first final judgment
U.S. District Court, District of Utah
Judge Robert J. Shelby grants the state summary judgment, holding the Commodity Exchange Act does not preempt Utah’s anti-gambling enforcement, and closes the case. Every other ruling on this page is preliminary; this one is on the merits. Case detail →
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August 28, 2026
The Ninth Circuit splits with the Third
U.S. Court of Appeals, Ninth Circuit
In a published opinion the panel affirms dissolution of Kalshi’s Nevada injunction, holding its sports event contracts are likely not “swaps” and in any event relate to “gaming,” and declines to defer to the CFTC. The election-contract question is remanded. Case detail →
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September 2, 2026
New Jersey petitions the Supreme Court
Supreme Court of the United States
One day before a twice-extended deadline, New Jersey files for certiorari, asking whether Dodd-Frank preempted states from regulating sports bets offered on CFTC-registered markets. Docketed September 8 as No. 26-299; Kalshi’s response is due November 9, 2026. The overwhelming majority of petitions are denied. Case detail →
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September 8, 2026
Two more losses in one day
U.S. Court of Appeals, Tenth Circuit; U.S. District Court, Southern District of Iowa
The Tenth Circuit refuses Kalshi an injunction pending its appeal of the Utah judgment, and Judge Stephen H. Locher denies Kalshi a preliminary injunction against Iowa, finding the Commodity Exchange Act unlikely to expressly preempt state gambling law. Kalshi appeals Iowa to the Eighth Circuit a week later. Case detail →
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September 9, 2026
Kalshi asks the full Ninth Circuit to rehear Assad
U.S. Court of Appeals, Ninth Circuit
Kalshi petitions for panel rehearing and rehearing en banc, which holds the mandate. Montana has since agreed not to enforce until that petition is resolved. Case detail →
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September 10–11, 2026
Robinhood and Crypto.com petition too
Supreme Court of the United States
The two platforms that lost alongside Kalshi in the Ninth Circuit file their own petitions: Robinhood Derivatives v. Dreitzer (No. 26-338) and North American Derivatives Exchange v. Nevada (No. 26-344). Robinhood asks the Court to hold its petition for the CFTC’s pending rule, or to grant it alongside New Jersey’s. Case detail →
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September 16, 2026
The Ninth Circuit sides with California tribes
U.S. Court of Appeals, Ninth Circuit
In a published opinion the court holds the tribes likely to succeed on their Indian Gaming Regulatory Act claim: Kalshi’s sports contracts are class III gaming when entered from tribal land, and the Commodity Exchange Act does not displace IGRA. It remands for the remaining injunction factors. Case detail →
Still undecided
Four more federal appeals could land before the Supreme Court acts, and any of them could deepen the split or narrow it.
Kalshi’s New York and Connecticut appeals (Nos. 26-1835 and 26-2239); the two injunction motions go to one panel, heard in tandem. Undecided.
Maryland, argued May 7, 2026 and undecided; both sides have filed letters over every ruling since, the latest on September 21. Kalshi lost below.
Tennessee and Ohio consolidated and argued July 30, 2026 — a pro-platform case against an anti-platform one. Undecided. Three Michigan appeals are being briefed behind it.
Three appeals from the Wisconsin order, consolidated; appellants’ briefs were due September 21, 2026. Kalshi separately asked on September 21 to appeal the Ho-Chunk Nation’s IGRA ruling (No. 26-8020).
Iowa: Kalshi appealed the September 8 denial of its injunction (No. 26-2874). Its opening brief is due November 6, 2026. The first time the question has reached this circuit.
Utah: the only appeal from a final judgment (No. 26-4100). The court refused an injunction pending appeal on September 8, 2026, so Utah may enforce while it runs.
This page is informational, not legal advice. Nearly every ruling described above is preliminary and under appeal, a filed certiorari petition is not a grant, and the overwhelming majority of petitions are denied. Verify a venue’s current, location-specific eligibility before relying on any of it.