A federal appeals court has ruled against Kalshi’s emergency request to halt enforcement action in Nevada, clearing the way for state regulators to move forward with restrictions on its sports-event contracts. The decision marks a significant development in the growing legal battle between prediction market platforms and US state authorities.
The Ninth Circuit Court of Appeals denied Kalshi’s motion to stay proceedings, effectively returning the case to federal court while allowing Nevada regulators to continue their enforcement efforts. As a result, Kalshi now faces the likelihood of a temporary restraining order (TRO) that could immediately halt its operations in the state.
Nevada Regulators Push Enforcement as Legal Pressure Mounts
According to gaming lawyer Daniel Wallach, a TRO issued by a Nevada state court now appears imminent. If granted, the order would prevent Kalshi from offering sports-related contracts in Nevada for at least 14 days, until a preliminary injunction hearing takes place. Because such restraining orders are not appealable under Nevada law, Kalshi would be required to suspend its services in the state during that period.
The Nevada Gaming Control Board had already issued a cease-and-desist order to Kalshi in March, arguing that its sports-event contracts qualify as unlicensed sports betting under state law. Kalshi, however, maintains that its offerings fall under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC), and that any attempt to block them would cause immediate and significant harm to its business.
This case highlights a broader regulatory clash unfolding across the United States. Prediction market platforms like Kalshi and Polymarket have seen rapid growth, with weekly trading volumes surpassing $2 billion. However, their rise has also drawn increased scrutiny from lawmakers concerned about risks such as insider trading and market manipulation.
Several states, including Connecticut, New York, and New Jersey, have initiated or are considering similar enforcement actions. Kalshi, along with other platforms like Crypto.com, Polymarket, and Coinbase, is now facing multiple legal challenges across jurisdictions.
