Ninth Circuit Rejects Kalshi, Crypto.com, and Robinhood's Argument on Sports Contracts

The Ninth Circuit Court of Appeals has made a significant ruling in the case against Kalshi, Crypto.com, and Robinhood over their sports-related event contracts. The court rejected the companies' argument that these contracts should be treated as 'swaps,' which would have exempted them from Nevada's gaming regulations.

The dispute centered on whether these contracts fall under federal financial regulatory frameworks or state-level gaming laws. The companies had sought to prevent Nevada's gaming regulator from halting their operations in the state, but the Ninth Circuit ruled that the sports-related contracts do not qualify as swaps.

This decision has significant implications for the three platforms, which have expanded into event-based markets. Kalshi, Crypto.com, and Robinhood may now face enforcement action concerning their sports-related products in Nevada, where gaming activities are subject to state oversight.