A panel of judges for the U.S. Ninth Circuit Court of Appeals on Wednesday denied Kalshi’s request for a rehearing in its case against the state of Nevada. The three-judge panel wrote that “The full court has been advised of the petition for rehearing en banc and no judge has requested a vote on whether to rehear the matter en banc.”
The denial means that the Ninth Circuit’s original decision that the state of Nevada can enforce its gambling laws against the prediction market platform are back in force, not just for Nevada, but for any state that is a member of the circuit.
Kalshi had requested that a bigger panel revisit the initial decision, which some saw as a way to buy time to continue operating, as the court rarely grants en banc hearings. For an en banc hearing to be approved, Kalshi would have had to prove that the original decision showed a “clear and irreconcilable” conflict with Ninth Circuit law, created an inter-circuit split (which it did, as the Third Circuit ruled in Kalshi’s favor earlier this year), or put the Ninth Circuit in the minority on circuit splits.
In 2024, 625 en banc petitions were submitted, 29 were approved, and nine cases “succeeded.”
The Ninth Circuit encompasses Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington. Kalshi and other prediction markets are already subject to state gambling laws in Nevada and Washington under state court orders. Those two states plus Michigan, which is in the Sixth Circuit, have already banned the platforms.
Second Kalshi loss in two days
The decision came one day after the Second Circuit denied Kalshi an injunction, meaning that the states of Connecticut and New York can enforce their gambling laws on the company and potentially win the right to ban them from their states.
So far, the Ninth Circuit has heard two cases involving Kalshi and has ruled in favor of a state or tribal group in both. The court in September overturned a district court ruling that allowed Kalshi to operate on tribal lands. The Ninth Circuit sent the case back to the district court, saying it believes the tribes can win the case based on its merits, and the U.S. District Court for the District of Northern California is now working with Kalshi and the tribes to sort out geofencing. A status conference in that case is set for Wednesday afternoon.
Kalshi is in court with more than a dozen states across the U.S. So far, the Ninth and Sixth Circuits have ruled in favor of states and the Third Circuit has ruled in favor of Kalshi, creating a split. New Jersey, the loser of the Third Circuit case, has petitioned the U.S. Supreme Court to hear its case.
