Kalshi Arizona dispute awaits Ninth Circuit appeals

"Kalshi, the Commodity Futures Trading Commission, the Justice Department, and Arizona regulators jointly asked a federal judge Friday (May 15) to pause litigation involving sports-event contracts offered on federally regulated exchanges. The request was filed in the U.S. District Court for the District of Arizona and asks Judge Michael T. Liburdi to freeze proceedings until the Ninth Circuit rules in at least one pending appeal tied to prediction-market platforms."

"The filing says "questions that bear directly on this case are pending before the Ninth Circuit." The Arizona case involves Kalshi and North American Derivatives Exchange, which operates as Crypto.com. They are suing Arizona Attorney General Kristin K. Mayes and Arizona Department of Gaming Director Jackie Johnson over whether the state can enforce gambling laws against contracts listed on CFTC-regulated exchanges."

"The latest filing follows a May 5 ruling in which Liburdi granted a preliminary injunction favoring the United States and the CFTC. It temporarily blocked Arizona from taking enforcement action against certain event contracts while the case proceeds. The same day, the judge directed both sides to explain whether the litigation should be paused."

"The parties pointed to three Ninth Circuit appeals they believe could directly influence the Arizona case: North American Derivatives Exchange, Inc. v. State of Nevada, KalshiEX, LLC v. Assad, and Robinhood Derivatives, LLC v. Dreitzer. According to the filing, those appeals "were consolidated for argument held April 16, 2026." Another closely watched matter, Blue Lake Rancheria v. Kalshi, Inc., is scheduled for oral arguments in July before a different appellate panel."

Kalshi, the Commodity Futures Trading Commission, the Justice Department, and Arizona regulators asked a federal judge in Arizona to pause litigation involving sports-event contracts offered on federally regulated exchanges. The request asks Judge Michael T. Liburdi to freeze proceedings until the Ninth Circuit rules in at least one pending appeal tied to prediction-market platforms. The filing states that questions bearing directly on the case are pending before the Ninth Circuit. A May 5 ruling granted a preliminary injunction blocking Arizona from taking enforcement action against certain event contracts while the case continues, and the judge required both sides to address whether the case should be paused. The parties cited multiple Ninth Circuit appeals that could affect the Arizona dispute, and another case is set for oral argument in July.

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