Ninth Circuit Rules Kalshi, Crypto.com and Robinhood Sports Contracts Are

The Ninth Circuit Court of Appeals has ruled that sports-related event contracts offered by Kalshi, Crypto.com and Robinhood are not “swaps,” rejecting the companies’ effort to prevent Nevada’s gaming regulator from taking action to halt their operations.

The decision represents a significant development in the dispute over how event-based financial contracts should be classified and regulated. The ruling could affect how platforms offering contracts tied to sports outcomes operate in Nevada, where gaming activities are subject to state oversight.

The development was highlighted in a recent update shared on X by @CoinMarketCap.

Ninth Circuit Rejects Companies’ Bid to Block Nevada Regulator

The case centers on sports-related event contracts offered through platforms operated by Kalshi, Crypto.com and Robinhood. The companies sought to prevent Nevada’s gaming regulator from stopping their operations in the state.

At the heart of the dispute was whether these contracts should be treated as “swaps.” The classification is important because swaps fall within a financial regulatory framework that differs from the rules governing gambling and gaming activities.

The Ninth Circuit rejected the companies’ position, ruling that the sports-related contracts at issue do not qualify as swaps. As a result, the court did not accept the companies’ effort to block Nevada’s gaming regulator from intervening.

The ruling places the state’s regulatory authority at the center of the dispute and leaves the companies facing the possibility of enforcement action concerning their sports-related products in Nevada.

Event Contracts Face Competing Regulatory Frameworks

Event contracts allow users to take positions based on whether a specified event will occur. In recent years, such products have expanded across financial and digital-asset platforms, including contracts connected to sporting events.

Their classification has become a point of regulatory debate because similar products can potentially fall under different legal frameworks depending on their structure and underlying event.

Financial markets generally operate under federal oversight, while gambling and gaming activities can be regulated at the state level. The distinction can therefore have direct consequences for companies seeking to offer event contracts across multiple jurisdictions.

The Ninth Circuit ruling addresses that distinction in the context of sports-related contracts offered by Kalshi, Crypto.com and Robinhood. By determining that the contracts are not “swaps,” the court rejected a key argument the companies had advanced in their effort to prevent Nevada authorities from halting the relevant operations.

Implications for Kalshi, Crypto.com and Robinhood

The decision affects three major platforms that have expanded their financial product offerings into event-based markets. Kalshi has built its platform around event contracts, while Crypto.com and Robinhood have also introduced products connected to prediction and event-based trading.

For these companies, the ruling underscores the importance of state-level regulatory requirements when sports-related contracts are offered to customers in jurisdictions with gaming laws.

The decision does not establish that all event contracts offered by financial or cryptocurrency platforms are subject to identical treatment. Instead, it addresses the specific sports-related contracts involved in the Nevada dispute and the companies’ argument that those contracts should be treated as swaps.

The ruling also illustrates the broader regulatory challenges facing platforms that operate across the boundary between financial markets and prediction markets. Companies may need to account for both federal financial regulations and state-specific rules when designing and distributing event-based products.

As regulators continue to examine these markets, the distinction between financial contracts and gaming products is likely to remain an important issue for platforms offering sports-related contracts.

Writer: Victoria Hale
Technology & Blockchain Writer

Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.

She prioritises clarity and accuracy when explaining technical developments to a general audience.