Ninth Circuit refuses to rehear Kalshi’s loss in Nevada sports contracts case

The U.S. Court of Appeals for the Ninth Circuit on November 4, 2026, denied Kalshi’s petition for panel rehearing and rehearing en banc in its case against Nevada gaming regulators, according to the docket. Judges Ryan D. Nelson, Bridget S. Bade and Kenneth K. Lee voted unanimously to deny it. The full court was told of the petition and no judge asked for a vote on rehearing it en banc.

The ruling that stands

The denial leaves in place the panel’s August 28 opinion in KalshiEX v. Assad (No. 25-7516). The panel upheld the district court’s decision to dissolve Kalshi’s preliminary injunction, holding that Kalshi had not shown the Commodity Exchange Act likely preempts Nevada’s gaming rules as applied to its sports event contracts.

The core of the opinion is the definition of a swap, which falls under the CFTC’s exclusive jurisdiction. Read broadly, the court said, the definition “might cover” sports event contracts, but that reading is not the best one in context and has no limiting principle. The panel sent Kalshi’s election contracts back to the district court, which had not analyzed them.

In a concurrence, Judge Lee said one provision gave him pause: the CEA’s Special Rule appears to give the CFTC discretion over whether to ban gaming contracts. He said the question did not need answering because CFTC Regulation 40.11 currently bars them, while noting the agency has proposed revising that rule.

What Kalshi argued

Kalshi’s September 9 petition said the decision “creates a circuit split” with the Third Circuit, which, in Kalshi’s account, held in KalshiEX v. Flaherty that sports event contracts fit within the swap definition. It called the panel’s reasoning “at war with itself” and said it would be obsolete once the CFTC finalizes a rule replacing Regulation 40.11. It also warned that Kalshi “now stands exposed to civil and criminal liability.”

Why it matters

With rehearing denied, the August ruling stands, and Kalshi has no injunction against Nevada’s enforcement as to its sports contracts. At least one state is already relying on it: Arkansas, which sued Kalshi on November 4, cites the Ninth Circuit decision and a Sixth Circuit ruling in its complaint as courts that have rejected Kalshi’s requests to shield its sports contracts. The circuit split Kalshi says exists with the Third Circuit is not addressed in the order.

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