Arizona Asks Ninth Circuit to Vacate Kalshi Gaming Injunction

Arizona has asked the U.S. Court of Appeals for the Ninth Circuit to summarily vacate a district court order that blocked enforcement of the state's gaming laws against designated contract markets offering sports-event contracts.

The request comes after the Ninth Circuit's recent opinion in KalshiEX, LLC v. Nevada, which rejected arguments that sports-event contracts qualify as swaps or excluded commodities under the Commodity Exchange Act. The panel concluded that the Commodity Futures Trading Commission lacks jurisdiction over such event contracts and that the federal statute does not preempt state gaming laws.

Arizona Says the Legal Picture Has Changed

Arizona officials argue that the Kalshi ruling marks a decisive change in the law.

In their view, the question is now settled. Sports-event contracts fall outside federal oversight, leaving states free to regulate or prohibit them under their own gaming statutes.

That argument places the Ninth Circuit's recent decision at the center of Arizona's latest request. The state is asking the court to apply its ruling to the existing dispute rather than allow the district court injunction to remain in place. The Kalshi decision is already affecting other litigation involving prediction markets and event contracts.

The State Wants the Injunction Vacated

The motion, filed by the Arizona Department of Gaming and the state's attorney general, asks the Ninth Circuit to vacate the district court's preliminary injunction and remand the case for further proceedings on election contracts.

The request comes as states continue to challenge the growing use of event contracts, particularly those tied to sports and other outcomes that traditionally fall within state gaming regulations.

For Arizona, the issue is straightforward. If the Ninth Circuit has determined that the federal commodities framework does not cover the sports-event contracts at issue, the state argues that there is no longer a basis for blocking enforcement of its gaming laws.

The Kalshi Ruling Is Already Having an Impact

Arizona's filing shows how the Kalshi decision is affecting other cases.

Prediction-market operators have argued that federal commodities law protects their event contracts from state regulation. States have pushed back, maintaining that contracts tied to sporting and other real-world outcomes can fall within their existing gaming laws.

The Ninth Circuit's ruling gave states a stronger position in that fight.

Arizona's latest motion is an early example of how state regulators may try to use the decision in other cases. Rather than treating the ruling as an isolated dispute, Arizona is asking the court to use it to clear the way for enforcement of state gaming rules.

What Happens Next?

The Ninth Circuit now has to decide whether to grant Arizona's request and vacate the preliminary injunction.

The outcome could affect other states. Other states are watching the courts as they consider how far their gaming authority extends over prediction-market platforms and sports-event contracts.

Arizona contends that the Ninth Circuit's Kalshi decision has changed the law enough to settle the central question.

The change is already underway. The question is how far it will go.