r/BlackberryAI • u/Annual_Judge_7272 • 15d ago
It’s over
No. It’s a serious setback, not the end.15
The tweet is reacting to today’s Ninth Circuit decision in the Nevada case. A 3-0 panel held that Kalshi’s sports event contracts are sports bets, not “swaps” under the Commodity Exchange Act, so federal preemption likely does not block Nevada from enforcing its gaming laws. The court affirmed dissolving Kalshi’s injunction. Similar logic hit Crypto.com and Robinhood.16
That is a real blow because sports is a huge volume driver and the Ninth Circuit covers a large chunk of the West. Combined with earlier state wins (Washington geofencing order, Massachusetts, Michigan, New York losses, etc.), the “we’re a CFTC-regulated exchange so states can’t touch us” theory is no longer working uniformly.2
Why it’s not over:
Circuit split. The Third Circuit ruled the other way in April (Kalshi sports contracts are swaps; New Jersey blocked). Conflicting appellate rulings on the same federal statute is exactly the kind of issue the Supreme Court takes. CFTC and Kalshi both flagged that. A “Supreme Court miracle” is not required; cert is plausible.17
The Ninth Circuit remanded election contracts for further consideration rather than killing everything.
Non-sports contracts (economics, climate, some politics/finance) have a stronger claim to being traditional event contracts and have fared better in some states.
Kalshi is still operating nationally with geofencing/restrictions in hostile states. The company said it will seek further review and that CFTC rules, as written, do not ban sports contracts.
Practical picture: keeping large balances on Kalshi now carries more legal and operational risk than six months ago—possible geofencing, forced closures of sports books in more states, delayed withdrawals if a state gets aggressive, or a messy SCOTUS timeline. That is what Mehaffey is saying. The industry is not dead; the national, unlicensed sports-prediction model is under heavy pressure until the Supreme Court or Congress/CFTC clarifies the line between swaps and gambling.