Ninth Circuit Splits From Rival Court on Whether States Can Regulate Kalshi, Setting Up Supreme Court Clash

On August 28, 2026, the Ninth Circuit held in KalshiEX, LLC v. Assad (No. 25-7516) that states may regulate prediction-market platforms under their own gambling laws, rejecting federal preemption. An April 2026 federal appeals court ruling reached the opposite conclusion, finding the CFTC's oversight exclusive. The circuit split turns on whether prediction markets are federally regulated derivatives or state-regulated gambling — a question with no doctrinal middle ground. Supreme Court review appears likely.