Kalshi ruling puts CFTC prediction rules at risk

A federal appeals court ruled on Aug. 28 that Kalshi had not shown Nevada’s regulation of its sports-event contracts was likely preempted by federal commodities law. Summary Ninth Circuit judges held Kalshi unlikely to block Nevada regulation of sports-event contracts through preemption. The ruling did not invalidate CFTC rulemaking or resolve any future Administrative Procedure Act challenge. A conflicting Third Circuit decision increases the possibility that the Supreme Court reviews Kalshi’s cases. Nevada’s election-contract challenge returns to district court while sports-contract enforcement may continue during litigation proceedings. The CFTC proposed ninety-day reviews for certain event contracts, including products involving gaming activities nationwide. The unanimous decision allows Nevada gaming authorities to enforce state requirements while litigation continues. The Ninth Circuit opinion also raised concerns under the major-questions doctrine. However, it did not invalidate the Commodity Futures Trading Commission’s proposed event-contract rules or decide whether a future final rule would survive an Administrative Procedure Act lawsuit. Kalshi ruling preserves Nevada’s ...