The Ninth Circuit Court of Appeals on Aug. 28 upheld Nevada’s authority to regulate Kalshi’s sports‑event contracts, rejecting the company’s claim that federal commodities law preempted state regulation. Kalshi had argued that its contracts were swaps under the Commodity Exchange Act and that, as a CFTC‑regulated designated contract market, federal law displaced Nevada’s gaming statutes. The court said the contracts more closely resembled sports bets and therefore fell outside the definition of a swap. The unanimous three‑judge panel dismissed Kalshi’s express, conflict and field‑preemption arguments, noting that the CFTC is not a national gambling regulator and that the company’s broader interpretation would trigger major‑questions concerns without automatically invalidating the agency’s rulemaking. The decision sent Kalshi’s separate election‑contract claims back to district court while allowing Nevada to enforce its sports‑betting rules during the litigation. A conflicting Third Circuit ruling in a New Jersey case had previously sided with Kalshi, creating a circuit split that could increase the chance of Supreme Court review, though such review is not certain. The CFTC’s June proposal to amend Rule 40.11, which would establish a 90‑day review process for event contracts involving gaming, terrorism, assassination, war or other unlawful activities, remains open for comment until July 27. The agency may revise, finalize or withdraw the rule after reviewing the submissions. Legal analysts have offered differing views: Daniel Wallach said the CFTC’s rulemaking is stalled and predicted an APA challenge in California, while David Schwartz, Ripple’s former CTO, argued that Congress could create a federal framework for exchange‑traded contracts without displacing state‑regulated sportsbooks. No APA complaint has been filed yet. The ruling leaves the CFTC proposal vulnerable to future legal challenges but does not stop its progress, and the ongoing split among the circuits means the eventual scope of federal regulation of prediction markets remains unresolved.