Kalshi is not done fighting Nevada.
The prediction market operator has petitioned the United States Court of Appeals for the Ninth Circuit for an en banc rehearing, asking a larger panel of judges to reconsider the three-judge decision that found Kalshi’s sports event contracts were likely not swaps under federal commodities law and could be regulated as gambling by Nevada.
Robinhood has taken a parallel route, filing a petition for United States Supreme Court review of the Ninth Circuit decision.
The filings arrive after a bruising stretch for the industry. Kalshi won an important preliminary ruling against New Jersey in the Third Circuit. It then lost in the Ninth Circuit in Nevada. That created a direct conflict over whether the Commodity Exchange Act preempts state gambling laws for sports contracts traded on a federally registered exchange.
New Jersey has already asked the Supreme Court to resolve that conflict.
Kalshi wants the full Ninth Circuit
Kalshi’s en banc petition challenges the Ninth Circuit’s Aug. 28 ruling, which was unanimous.
The three-judge panel held that Kalshi’s sports contracts were likely not swaps under the Commodity Exchange Act, which gives the Commodity Futures Trading Commission exclusive jurisdiction over swaps traded on a designated contract market. Still, the court concluded Kalshi could not invoke that protection because its sports products did not fit the statutory definition.
Kalshi is now asking the larger Ninth Circuit to revisit that conclusion. According to its petition, rehearing is necessary because the ruling created a circuit split on an important federal-preemption question, rested on internally inconsistent reasoning and conflicts with the Commodity Exchange Act’s text.
Robinhood goes straight to SCOTUS
Robinhood is taking the more aggressive procedural path.
The brokerage has filed a petition for a writ of certiorari asking the Supreme Court to review the Ninth Circuit ruling. Robinhood was one of the companies whose Nevada disputes were consolidated into the decision, alongside Kalshi and Crypto.com.
Robinhood’s position is that eligible customers should be able to access these federally regulated markets through its CFTC-registered futures commission merchant. The company said after the Ninth Circuit decision that it respectfully disagreed with the ruling and intended to appeal.
The split approach may be deliberate.
Kalshi’s en banc request gives the Ninth Circuit a chance to correct or narrow its own decision. Robinhood’s Supreme Court petition gives the industry a direct path toward nationwide review.
Neither petition guarantees Supreme Court review. The Court accepts only a small share of cases. But the legal question is now difficult for the justices to ignore. Can states enforce gambling laws against sports event contracts traded through federally regulated exchanges, or does the Commodity Exchange Act preempt them?
The Third-Ninth Circuit split
The appellate split is the reason the Supreme Court issue has become real in the prediction markets legal fight.
In April, the Third Circuit sided with Kalshi in its fight against New Jersey regulators. The court held that Kalshi’s sports event contracts could qualify as swaps under the Commodity Exchange Act and that the federal statute likely preempted New Jersey from enforcing its gambling laws against the platform.
Then came Nevada.
The Ninth Circuit accepted Kalshi’s basic premise that the Commodity Exchange Act expressly preempts state regulation of qualifying swaps traded on a designated contract market. But it reached the opposite answer on the threshold question: sports contracts are not the kind of swaps Congress had in mind.
The court contrasted traditional swaps, which allow counterparties to exchange cash flows tied to financial risks like interest rates, currencies and commodity prices, with Kalshi’s sports contracts. Those products, it said, do not hedge existing financial risks; they create new risk for ordinary consumers.
The Tenth Circuit also recently ruled against Kalshi, siding with Utah. Another appeal is awaiting a decision in the Sixth Circuit.
New Jersey’s petition grows more important
New Jersey filed its own Supreme Court petition on Sept. 2, asking the Court to overturn the Third Circuit decision that blocked the state from enforcing its gambling laws against Kalshi. The state argues that companies cannot turn ordinary sports betting into federally protected derivatives simply by listing contracts on a designated contract market.
New Jersey’s petition was already significant because it put the industry’s core legal theory before the Supreme Court. The Ninth Circuit’s Nevada ruling made it more compelling by creating a direct conflict with the Third Circuit.
Robinhood’s petition adds the inverse argument. The Supreme Court should take the case not to affirm state authority, but to protect federal authority and prevent an exchange operator from facing different rules in every state.
The Supreme Court has not yet decided whether to hear either request.
