Kalshi suffered its second Ninth Circuit setback in less than three weeks. Meanwhile, a federal gambling tax fix moved closer to a House vote.
The Ninth Circuit delivered another significant ruling on sports event contracts on Wednesday, siding with two California Tribes on key parts of their challenge to Kalshi and Robinhood and sending their request for a preliminary injunction back to the district court.
Elsewhere, a House committee advanced legislation to restore the full federal deduction for gambling losses. Meanwhile, New York reported continued growth in mobile sports betting alongside an increase in problem-gambling calls, and new enforcement actions emerged in college sports and in Australia.
The Big Story: Ninth Circuit Sides With Tribes in Kalshi Sports Contract Case
A three-judge Ninth Circuit panel on Wednesday sided with two California Tribes in their challenge to Kalshi and Robinhood, reversing in part a lower-court decision denying a preliminary injunction.
The panel found the Tribes likely to succeed in showing Kalshi’s sports-event contracts constitute Class III gaming under the Indian Gaming Regulatory Act (IGRA) when entered into on Tribal lands. The court was direct in rejecting Kalshi’s distinction between event contracts and traditional sports wagers. It cited the Ninth Circuit’s recent Nevada ruling:
The substance of the sports event contracts offered on Kalshi’s DCM is sports gambling, regardless of whether Kalshi calls them swaps.”
It added that “the only thing that changes is Kalshi’s vocabulary.”
The panel also rejected Kalshi’s argument that the Commodity Exchange Act’s exclusive-jurisdiction provision displaced IGRA. The court said the statutes address different questions.
The panel found it “implausible” that Congress intended to take “a wrecking ball to all sports gambling regulations built up over decades by federal, state, and tribal governments.”
The ruling is Kalshi’s second loss before a Ninth Circuit panel in less than three weeks following a separate panel’s Nevada ruling. It does not immediately impose an injunction; the case is remanded for consideration of the remaining factors.
Gaming attorney Daniel Wallach noted Kalshi is now 0-6 among judges across the two Ninth Circuit appeals. He said that further diminishes its prospects of securing en banc rehearing in the Nevada case. Wallach added that Wednesday’s decision could reverberate through pending and future Tribal challenges to sports event contracts.
The Daily Wire
Gambling Loss Deduction Fix Advances in House
A congressional effort to restore the full federal tax deduction for gambling losses cleared a significant hurdle Wednesday.
The House Ways and Means Committee approved a broader tax package 38-5 that includes provisions of Rep. Steven Horsford’s FULL HOUSE Act. The legislation would restore the ability to deduct gambling losses up to 100% of gambling winnings. The package now moves to the full House.
The provision seeks to reverse a change enacted in 2025 that limited the deductibility of gambling losses to 90%. The new law potentially leaves gamblers with taxable income even when their overall gambling activity produced no net profit.
“No one should pay taxes on money they never earned,” Rep. Horsford said in a press release.
Nevada Rep. Dina Titus, who was among the leading members of Congress pushing to reverse the change through separate legislation, welcomed the provision’s inclusion in the package. American Gaming Association President Bill Miller said the Association is “grateful for this critical step.”
New York Sports Betting Tax Revenue Reaches $1.3B
New York State Comptroller Thomas DiNapoli released a “Sports Wagering in New York” report on Wednesday. The report highlights that mobile sports betting has generated $1.3 billion in tax revenue for the state during the State Fiscal Year 2026. That made it the state’s second-largest source of gaming revenue, behind the lottery.
Tax collections from mobile wagering increased 78.4% from $727.4 million in SFY 2023. More than $91.2 billion has been wagered through New York mobile sportsbooks since their January 2022 launch, producing $8.3 billion in gross gaming revenue.
The report also highlighted responsible-gambling concerns. New York’s HOPEline received 2,545 calls in 2025, an 8.5% increase from 2020.
DiNapoli also singled out the growth of prediction markets. The report noted that sports accounted for 79.8% of Kalshi’s trading volume and 51.2% of Polymarket’s trading volume over the period examined.
Furthermore, the report states that since sports-event contracts were added, global trading on Kalshi increased to $24 billion and on Polymarket to $27.1 billion. The Comptroller’s office said combined trading volume through July had reached $208.6 billion.
Former NC A&T Coach Receives Four-Year Show-Cause Order
Former North Carolina A&T men’s basketball assistant coach Patrick Herron received a four-year show-cause order for violating NCAA sports betting rules.
According to an agreement released by a Division I Committee on Infractions hearing panel, Herron placed at least $4,000 in wagers on professional and college sports through a bookmaker who was a childhood friend. He also distributed parlay sheets to other friends for the bookmaker and received a 20% commission on bets generated through them. None of the wagers involved North Carolina A&T teams.
The NCAA classified Herron’s conduct as a Level I-standard violation. The governing body noted that his work on behalf of the bookmaker elevated the case beyond previous staff betting cases that had been treated as Level II violations.
The show-cause order runs through September 2030. Herron would also face a 10-game suspension if employed by another NCAA institution during the third year of the order.
Ohio Leaves NCPG Over Kalshi Partnership
The Ohio Casino Control Commission has withdrawn from the National Council on Problem Gambling over the organization’s relationship with Kalshi. Ohio had ended its membership in June, although the move became public during discussions by the Massachusetts Gaming Commission over whether it should also leave the organization.
The move follows the withdrawals of Michigan and Nevada regulators from NCPG over its relationship with Kalshi. Massachusetts regulators voted last week to remain members while continuing to monitor developments.
SciPlay CEO Josh Wilson to Step Down
Light & Wonder announced that SciPlay CEO Josh Wilson will step down when his current contract expires on October 30. The company has begun searching for a successor.
During the process, Light & Wonder CFO Oliver Chow will assume executive oversight of the social casino business beginning November 1. Chow will retain his CFO position during the transition.
Light & Wonder said the leadership change does not alter its strategy for SciPlay or its social casino portfolio. CEO Matt Wilson reiterated the company’s confidence in the category and its direct-to-consumer growth opportunity.
That confidence comes despite continued pressure on SciPlay’s broader performance. In the latest quarterly earnings call, Wilson said the company is “not happy with the result of SciPlay and where we’re at, and we take accountability for that.”
Dabble Pays More Than A$1M Over Self-Exclusion Failures
Australian regulator Australian Communications and Media Authority (ACMA) has issued A$1,069,200 (~$760,000) in penalties against Dabble Sports over failures involving the country’s BetStop national self-exclusion register.
The regulator found Dabble failed to close 157 wagering accounts after customers registered with BetStop. The company also sent 165 self-excluded people a total of 839 electronic messages, including SMS, emails and app push notifications.
According to the ACMA, Dabble also sent more than 2,000 push notifications to 45 customers without including information about BetStop, as required under the gambling self-exclusion rules.
The post The Gambling Wire: Ninth Circuit Rules Against Kalshi as Gambling Loss Deduction Fix Advances appeared first on Gambling Insider.