Nevada state gaming regulators have officially opposed a request by prediction market operator Kalshi to delay a Ninth Circuit rehearing en banc, arguing that planned regulatory revisions by the Commodity Futures Trading Commission (CFTC) will not change the legal outcome of the case. In a filing submitted on October 5, 2026, Nevada’s counsel Nicole Saharsky of Mayer Brown stated that the court’s earlier decision rested directly on the text and purpose of the federal Commodity Exchange Act rather than specific CFTC rulemaking language, leaving no justification for putting appellate proceedings on hold.
The dispute centers on Kalshi’s petition filed on September 25, 2026, requesting the full Ninth Circuit to review the August panel ruling that refused to block Nevada regulators from overseeing the company’s platform. Kalshi had argued that proceedings should be stayed pending the publication of the CFTC’s revised Section 40.11 regulations, which the federal derivatives regulator aims to finalize within two months. Nevada countered that the appellate panel already considered the CFTC’s regulatory trajectory and determined that event contracts on sporting competitions do not qualify as financial swaps exempt from state gaming enforcement.
For online gaming operators and platform vendors, the case represents a critical test of state versus federal jurisdiction in the United States. If federal courts maintain that event contracts are subject to state gambling laws, prediction markets will not serve as an unlicenced bypass around state regulatory systems and tax frameworks. Recent appellate decisions from the Sixth and Ninth Circuits demonstrate growing judicial consensus that individual states retain full authority to regulate sports wagering mechanics regardless of federal derivative classifications.
Source: CasinoBeats