Key Points
- Nevada’s First Judicial District Court granted a 14-day temporary restraining order targeting Kalshi on Friday
- The ruling suspends Kalshi’s ability to offer sports, entertainment, and election-based contracts within state borders
- Nevada’s Gaming Control Board initially directed Kalshi to cease sports contract operations in 2025
- Federal CFTC leadership claims exclusive jurisdiction over prediction markets, creating conflict with state authorities
- Arizona prosecutors filed charges against Kalshi for operating without proper gambling licenses this week
A Nevada court has mandated that prediction market operator Kalshi cease offering event-based contracts within the state for a minimum of two weeks. The temporary restraining order was issued by Nevada’s First Judicial District Court on Friday, March 20.
The court order encompasses the platform’s sports, entertainment, and political election contracts. A subsequent court hearing has been set for April 3.
This legal conflict has been brewing for months. Nevada’s Gaming Control Board initially delivered a cease-and-desist directive to Kalshi in 2025, demanding the platform discontinue sports-related event contracts within Nevada’s jurisdiction.
Kalshi contested this action, maintaining that federal regulation governs its operations and should supersede state-level authority. The company attempted to transfer the proceedings to federal court.
That strategy proved unsuccessful. On Thursday, the U.S. Court of Appeals for the Ninth Circuit rejected Kalshi’s request to pause the case and returned jurisdiction to Nevada courts.
The Nevada judge determined that the gaming board cannot fulfill its regulatory responsibilities while Kalshi operates without state licensing. The court stated that an “unlicensed participant beyond the Board’s control” prevents the board from executing its statutory obligations.
Kalshi has not issued a statement regarding the Nevada decision.
Federal Regulator Asserts Control
On the federal front, U.S. Commodity Futures Trading Commission Chair Michael Selig has actively opposed state enforcement actions. He submitted a court brief contending that the CFTC, rather than individual states, possesses proper regulatory authority over prediction market platforms.
Selig has articulated this position at multiple public forums and has pledged his agency will continue asserting its jurisdictional rights. The CFTC has additionally issued guidance clarifying that exchanges offering event-based contracts must comply with requirements under the Commodity Exchange Act.
Major League Baseball has aligned with the federal regulatory framework, executing a memorandum of understanding with the CFTC regarding prediction market supervision. MLB also revealed a separate collaboration with Polymarket this week.
Growing State Enforcement Actions
Nevada isn’t alone in taking action against Kalshi. Earlier this week, Arizona’s attorney general filed charges accusing the company of operating an unlicensed gambling enterprise and facilitating illegal election betting.
Tennessee has similarly initiated legal proceedings against prediction market platforms concerning sports-event contracts.
At the congressional level, legislators have also voiced concerns. In January, Democrat Rep. Ritchie Torres proposed legislation to restrict how elected officials engage with prediction markets, prompted by wagers placed on former Venezuelan President Nicolás Maduro’s potential capture.
Last week, Democratic lawmakers unveiled the “Death Bets Act,” which seeks to prohibit prediction market contracts related to death, warfare, or assassination attempts.
The Nevada court acknowledged that the federal preemption question in this domain is “nuanced and rapidly evolving.”
The next scheduled court appearance in the Nevada matter is April 3, 2026.
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