Kalshi and Arizona gaming regulators need the Ninth Circuit to slow down an appeal that might assist outline how far federal commodities regulation reaches into state playing enforcement. In a joint submitting submitted Could 27, each side requested the court docket to pause briefing whereas a number of associated appeals already pending earlier than the identical circuit are determined.
The request follows oral arguments heard in April involving Kalshi, Robinhood Derivatives and North American Derivatives Change. These concentrate on whether or not the Commodity Change Act offers the Commodity Futures Buying and selling Fee unique authority over occasion contracts supplied via federally regulated exchanges.
The events advised the court docket that any pending appeals “might bear on the questions at problem on this enchantment” and argued that ready for selections would assist produce briefs “that might be most helpful to the Court docket.”
Beneath the present schedule, Kalshi’s opening transient is due June 8. The proposed pause would hold briefing on maintain till 30 days after rulings arrive in KalshiEX, LLC v. Assad, North American Derivatives Change, Inc. v. Nevada, and Robinhood Derivatives, LLC v. Dreitzer.
Federal and state battle intensifies as Kalshi and Arizona regulators’ case is heard within the Ninth Circuit
On Could 21, 2025, the Arizona Department of Gaming sent Kalshi a cease-and-desist letter. Regulators claimed the corporate was illegally providing “occasion wagering” with out “licensure and compliance with Arizona statutes and rules.”
Kalshi responded by filing suit in federal court docket on March 12, 2026, towards Arizona gaming director Jackie Johnson and Legal professional Normal Kristin Mayes. The corporate argued that federal regulation preempts Arizona from regulating contracts traded on federally accredited Designated Contract Markets.
Days later, Kalshi sought emergency aid via a short lived restraining order and preliminary injunction. Arizona then filed a criminal information against the company in state court docket the identical day.
The authorized battle widened additional when the Commodity Futures Buying and selling Fee and the United States filed their own federal lawsuit on April 2. Federal legal professionals requested the court docket to dam Arizona from imposing “state legal guidelines pertaining to playing or wagering” towards “CFTC-Designated” exchanges resembling Kalshi.
A federal choose later denied Kalshi’s separate request for a preliminary injunction, ruling that the Anti-Injunction Act prevented the court docket from stopping the continued state prosecution. Nonetheless, the choose additionally concluded that federal involvement “forecloses Youthful abstention.”
Weeks later, the same court granted a preliminary injunction requested by the federal authorities. The choose decided federal authorities have been more likely to succeed on their preemption argument and blocked Arizona’s legal case from shifting ahead whereas litigation continues.
Arizona now has till July 6, 2026 to enchantment that ruling.
Within the newest submitting, each side argued that pausing the present enchantment would promote effectivity whereas avoiding overlapping arguments. Additionally they indicated that if Arizona challenges the federal injunction, they could ask the Ninth Circuit to coordinate each appeals collectively.
Featured picture: Kalshi / Canva
