Ninth Circuit Rules Sports Event Contracts Are Sports Betting, Not Federal Derivatives

The U. S. Ninth Circuit Court of Appeals has denied injunction relief sought by prediction market platforms against the Nevada Gaming Control Board, ruling that sports-related event contracts are not derivatives regulated by the federal government. The court dismissed appeals from Kalshi and Crypto. com, which sought to block Nevada from halting their operations, which the state deemed gambling outside the board's regulatory framework. The court also rejected an injunction request from Robinhood, which offers event contracts on its trading platform. Sports-related event contracts are treated as sports betting in 44 states.

The platforms and their federal regulator, the Commodity Futures Trading Commission (CFTC), argued that all event contracts, regardless of underlying asset, are swaps—a type of derivative under CFTC jurisdiction—and that the agency has exclusive regulatory authority. The CFTC has filed suit against nine states to assert its rulemaking power over prediction markets. In its ruling, the Ninth Circuit held that sports event contracts are not swaps because they are inherently sports betting. This decision conflicts with a ruling by the Third Circuit Court of Appeals in early April 2026, which found that only the CFTC has jurisdiction over sports-related event contracts.

Robinhood said in a statement that it plans to appeal. Kalshi, Crypto. com, and the Nevada Attorney General's office did not immediately respond to requests for comment. Following the ruling, online sports betting operator DraftKings rose 7%, and Flutter Entertainment, parent of FanDuel, gained more than 6%.