The Ninth Circuit denied bids by Kalshi and Polymarket to halt proceedings tied to lawsuits in Nevada and Washington and sent the cases back to state court. The dispute centers on whether federal authority through the CFTC preempts state gambling law, but the appeals court allowed the state actions to continue. Nevada gaming regulators, who sued in February, allege that some markets offered unlicensed gambling. The ruling keeps alive the broader legal fight over whether prediction market contracts should be treated as federally regulated derivatives or as products subject to state gambling enforcement.