Quick Overview
- Kalshi’s emergency appeal to halt Nevada enforcement action was rejected by the Ninth Circuit Appeals Court
- Nevada regulators can now move forward with a temporary restraining order, likely suspending Kalshi’s state operations for a minimum of 14 days
- The Nevada Gaming Control Board issued cease-and-desist orders to Kalshi back in March, citing unauthorized sports wagering activities
- Kalshi maintains its contracts operate under federal CFTC oversight rather than state-level gambling regulations
- Multiple states including Connecticut, New York, and New Jersey have launched comparable enforcement efforts against Kalshi and competing platforms
The Ninth Circuit Appeals Court rejected Kalshi’s emergency motion seeking to prevent Nevada from implementing enforcement measures against its sports-event contracts. This decision enables state authorities to move ahead with regulatory action.
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Back in March, the Nevada Gaming Control Board delivered cease-and-desist orders to Kalshi. State officials contend that Kalshi’s sports-event contracts constitute unlicensed sports wagering activities under Nevada statutes.
Daniel Wallach, an attorney specializing in gaming law, indicated that a temporary restraining order appears likely. According to Nevada legal procedures, TROs cannot be challenged through appeals, which would require Kalshi to cease state operations for a minimum two-week period.
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“Since a TRO is not appealable under Nevada law, Kalshi would be required to exit the state in the interim,” Wallach said.
Kalshi responded through court filings, asserting that its contracts fall exclusively under Commodity Futures Trading Commission jurisdiction. The company stated that preventing these contracts from operating would inflict “imminent harm” on its business operations.
The legal matter heads back to federal court proceedings as Nevada continues with its enforcement measures.
Kalshi Raises Concerns About Contradictory Legal Outcomes
Through a March 13 filing, Kalshi expressed concern that permitting Nevada to advance its case during ongoing federal proceedings could result in conflicting judicial determinations.
Kalshi stated the two court systems might arrive at “exactly the opposite conclusion” regarding whether federal commodities regulations supersede state gambling statutes. The platform warned this scenario could “create jurisdictional chaos.”
The central question revolves around which authority holds ultimate jurisdiction — federal oversight bodies or state gaming commissions.
Multiple States Launch Similar Enforcement Campaigns
Nevada’s actions represent part of a broader trend. Connecticut, New York, New Jersey and additional states have initiated enforcement proceedings against sports-event contracts provided by prediction market operators.
Kalshi faces company alongside other platforms encountering regulatory challenges. Crypto.com, Polymarket and Coinbase all face ongoing legal confrontations with various state authorities regarding comparable offerings.
Prediction markets have experienced rapid expansion. Weekly transaction volumes across platforms including Kalshi and Polymarket frequently exceed $2 billion, based on Dune Analytics data.
This substantial growth has attracted scrutiny from policymakers worried about insider trading risks and potential market manipulation activities.
Throughout these legal challenges, Kalshi has consistently argued that state regulatory bodies lack authority to limit federally supervised event contracts.
The upcoming critical milestone involves a preliminary injunction hearing, which will establish whether Kalshi can continue Nevada operations during the extended legal proceedings.
