Sports Events Contracts: Swaps or Wagers?

On November 25, 2025, KalshiEX, LLC (“Kalshi”) filed a notice of appeal to the Ninth Circuit in its case against the Nevada Gaming Control Board and the Nevada Gaming Commission. Kalshi has asked the Ninth Circuit to review the district court’s order to dissolve the preliminary injunction it issued in April. Kalshi argued the preliminary injunction was protecting it from action the Nevada state regulators.

Kalshi is a financial exchange and predictions market where users can purchase event contracts, i.e., users can trade “on the outcome of future events.”[1] Kalshi has registered with the Commodities Future Trading Commission (CFTC) as a designated contract market and maintains its event contracts are swaps under the CFTC’s definitions.[2] Kalshi has included sports in its event contracts and has allowed users to trade on the outcome of games in the NBA, NFL, NHL, college football and others. State regulators disagree with Kalshi’s characterization and have argued these “swaps” are actually sport wagers. Among those states is Nevada, which sent Kalshi a cease-and-desist letter. The letter alleges multiple state law violations and threatens civil and criminal penalties for enabling sports wagers on its platform. The company filed for the preliminary injunction in response.

Whether these event contracts are swaps under the CTFC or wagers falling under state regulation is important to both parties. In most states, the legal age of sports betting is 21, however since Kalshi registered with the CTFC, it has made its sports event contracts open nationwide to users 18 and older. Kalshi is also able to circumvent state gambling license requirements, including providing its platform in states where sports betting is not legalized, and avoid state gambling taxes as it continues to operate under federal regulation.

Several courts across the country are facing the same question, which may require the U.S. Supreme Court to ultimately decide whether sports events contracts are swaps or wagers.

[1] https://kalshi.com/about

[2] A contract that provides for a payment that is dependent on the occurrence or nonoccurrence “of an event or contingency associated with a potential financial, economic, or commercial consequence.” See 7 USC § 1a(47)(A)(ii).