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... In a unanimous ruling, a three-judge panel agreed with a lower court decision allowing Nevada gaming regulators to oversee the prediction market Kalshi, which argued only the federal government has the authority to regulate event contract platforms.

Specifically, Kalshi argues the sports event contracts offered by prediction markets are "swaps," part of a designated contract market that falls under the jurisdiction of the Commodity Futures Trading Commission (CFTC).

Friday's opinion, written by Circuit Judge Ryan Nelson, said Kalshi did not show a "likelihood" the Commodity Exchanges Act (CEA) preempts state gaming regulations when it comes to sports event contracts. The act gives the CFTC the legal authority to regulate U.S. derivatives markets.

"However, under the CEA's definition ... the sports event contracts were not swaps' because they were sports bets," Nelson wrote for the panel. "As to conflict preemption, the panel rejected Kalshi's argument that it was impossible to comply with both Nevada law and the CEA, and that Nevada law posed an obstacle to the CEA's purposes."

"The substance of the sports event contracts offered on Kalshi's DCM is sports gambling, regardless of whether Kalshi calls them swaps," Nelson added.

The other two judges on the panel were Judges Kenneth Kiyul Lee, who wrote a concurring opinion, and Judge Bridget Bade. ...