Kalshi’s state-law fight now turns on a direct split between federal appeals courts and an emergency CFTC order in New York. The Ninth Circuit let Nevada enforce gaming rules against Kalshi’s sports event contracts on August 28, while the Third Circuit kept New Jersey blocked from doing the same on April 6. The conflict gives the Supreme Court a live vehicle to decide how far federal commodities law reaches into sports-linked event contracts.
Which states have actually restricted Kalshi access?
By early September 2026, state restrictions on Kalshi were not uniform. They depended on the jurisdiction, the contract category, and whether a court had entered or stayed an injunction.
In Nevada, the U.S. Court of Appeals for the Ninth Circuit ruled on August 28 in KalshiEX LLC v. Assad, No. 25-7516, that Kalshi had not shown the Commodity Exchange Act likely preempts Nevada’s gaming regulations as applied to sports event contracts. The panel affirmed dissolution of Kalshi’s preliminary injunction on sports contracts and remanded the separate election-contract issue for further district-court review.
In Washington, Attorney General Nick Brown’s office said a King County Superior Court judge issued an order announced August 13 requiring Kalshi to stop offering event contracts tied to sports, elections, politics, entertainment, culture, tech and science, and mentions in Washington. The order set an IP-address and residency geofence deadline of August 19, a multi-source geofencing deadline of September 2, and a $120,000-per-day consequence tied to noncompliance.
Michigan is also enforcing a state-court restriction against Kalshi’s sports contracts. Attorney General Dana Nessel’s office said in June that it secured a temporary restraining order in Ingham County Circuit Court halting Kalshi from offering online sports wagers to Michigan residents. A later preliminary injunction signed September 1 by Judge Rosemarie Aquilina continued the sports-market block and raised the daily penalty tied to geofencing failures to $500,000.
Massachusetts is in a different posture. Suffolk Superior Court issued an injunction on January 20, 2026, with Judge Christopher Barry-Smith presiding, but that order has been stayed while the state Supreme Judicial Court appeal proceeds. Connecticut has moved against Kalshi at the federal district-court level: U.S. District Judge Vernon Oliver denied Kalshi’s emergency injunction pending appeal on August 15, after denying preliminary relief on August 10.
New Jersey and Maryland do not fit the same access-restriction category. In New Jersey, Kalshi remains protected by a federal preliminary injunction that the Third Circuit affirmed April 6 in KalshiEX LLC v. Flaherty, No. 25-1922. In Maryland, enforcement was paused while the Fourth Circuit considers the state’s appeal after argument on May 7.
What did the Ninth Circuit say about Nevada?
The Ninth Circuit’s August 28 decision is the clearest recent win for state gambling regulators. The unanimous three-judge panel held that Kalshi had not shown a likelihood that the CEA preempts Nevada’s gaming regulations as applied to sports event contracts. The court affirmed dissolution of the injunction covering sports-related contracts and returned the election-contract question to the district court.
The court’s reasoning narrowed Kalshi’s central preemption claim. It held that the sports contracts at issue were likely not swaps under the CEA and that CFTC regulations currently bar designated contract markets from listing contracts involving gaming. That matters because Kalshi’s defense depends on treating its contracts as federally regulated derivatives, not state-regulated sports wagers.
Judge Kenneth Lee wrote separately, agreeing with most of the statutory analysis while emphasizing the long role of states and tribes in gambling regulation. That concurrence gives state regulators language to cite when arguing that sports event contracts function like sports betting, even when offered through a federally registered designated contract market rather than a sportsbook licensed by a state gaming agency.
The Nevada ruling does not end the case. Kalshi can continue litigating the preemption issue, and the remand leaves election contracts unresolved in that proceeding. Still, the opinion changes the leverage. Nevada can proceed under its gaming framework unless another order changes the posture, and other state regulators now have a federal appellate decision supporting their position.
How does the Third Circuit ruling conflict with Nevada?
The Third Circuit reached the opposite result in New Jersey. On April 6, in No. 25-1922, the court affirmed Kalshi’s preliminary injunction against New Jersey officials. Judge David Porter, joined by Chief Judge Michael Chagares, held that Kalshi had shown a reasonable chance of success on its argument that the CEA preempts otherwise applicable state law as applied to its sports-related event contracts.
Judge Jane Richards Roth dissented, arguing that states have long regulated gambling and that federal preemption should not displace that authority in the way the majority allowed. The split between the Third and Ninth Circuits now gives both sides a clean appellate conflict. State officials point to gambling authority and consumer-protection interests. Kalshi points to federal commodities-law uniformity and CFTC oversight.
The CFTC has criticized the Ninth Circuit decision. CFTC spokesman Zach Fulton told The Block that the ruling set up a circuit split for potential Supreme Court review and said the court misread the statute and regulations. New Jersey has already moved in that direction. Attorney General Jennifer Davenport and state gaming officials filed a 332-page Supreme Court petition on September 2 seeking review of the Third Circuit’s pro-Kalshi ruling.
What is the CFTC’s New York order about?
New York Attorney General Letitia James sued Kalshi on July 31, alleging that the company operated an illegal, unlicensed gambling business through its prediction-market platform. The attorney general’s office said the suit seeks a court order stopping Kalshi from operating as an unlicensed gambling business, plus fines, forfeiture of illegal gains, and restitution to users.
On August 11, CFTC Chairman Michael Selig invoked emergency authority after Kalshi notified the agency of a market emergency. In Release 9281-26, the CFTC ordered Kalshi to continue operating in accordance with the Commodity Exchange Act’s core principles. The agency said New York’s July 31 lawsuit sought a temporary restraining order prohibiting Kalshi from offering all event contracts nationwide and more than $36 billion in damages.
The order is not a final ruling that New York gambling law is preempted. It does not decide whether the attorney general’s claims succeed, and it does not resolve the broader state-versus-federal question. It does show that the CFTC is willing to use emergency authority when a state enforcement action could interrupt the operations of a federally regulated prediction-market exchange.
Where are the other state cases headed?
Several cases remain live without a final appellate answer. In Utah, U.S. District Judge Robert Shelby ruled against Kalshi on preemption grounds on August 4, and Governor Spencer Cox publicly argued that prediction markets fall within gambling regulation. In Ohio and Tennessee, a consolidated appeal is pending before the Sixth Circuit after argument on July 30.
Minnesota moved in the opposite direction at the district-court level. The state enacted legislation in May 2026 that would have criminalized operating prediction markets starting August 1. On July 27, U.S. District Judge Katherine Menendez granted a preliminary injunction blocking enforcement of the law against CFTC-registered designated contract markets, after motions by the CFTC, Kalshi and Polymarket. Under that order, Kalshi and Polymarket can continue serving Minnesota users while the case proceeds.
Arizona, Kentucky, Illinois, Montana and New Mexico have also been part of the broader state enforcement and litigation wave. The pressure point, though, has shifted from individual cease-and-desist fights to appellate courts and the Supreme Court petition stage. States have already tested Kalshi’s CFTC registration against gambling law. The unresolved question is which court gets the last word on the conflict.
What is the next milestone?
The next concrete milestones are appellate decisions and Supreme Court briefing, not a single nationwide compliance date. The Fourth Circuit has heard argument in the Maryland dispute, with no decision date announced. The Sixth Circuit has heard argument in the Ohio and Tennessee appeal, with a decision pending after July 30. New Jersey’s September 2 Supreme Court petition gives the justices a vehicle to review the Third Circuit’s April 6 ruling and, potentially, the broader split created by the Ninth Circuit’s August 28 Nevada decision.
