Key Takeaways
- Kalshi’s emergency motion to prevent Nevada enforcement has been rejected by the Ninth Circuit Appeals Court
- Nevada regulators can now proceed with a temporary restraining order, potentially halting Kalshi’s state operations for a minimum of 14 days
- In March, Nevada’s Gaming Control Board ordered Kalshi to cease operations, citing unauthorized sports wagering activities
- Kalshi maintains its event contracts are under exclusive CFTC oversight, not state gaming regulations
- Multiple states including Connecticut, New York, and New Jersey are launching parallel enforcement efforts against Kalshi and competing platforms
The Ninth Circuit Appeals Court has rejected Kalshi’s urgent petition to prevent Nevada from implementing enforcement measures against its sports-related event contracts. This decision opens the door for state authorities to move forward with regulatory action.
https://twitter.com/coinbureau/status/2024026094609768527?s=20
Back in March, Nevada’s Gaming Control Board delivered a cease-and-desist order to Kalshi. State regulators contend that Kalshi’s sports-event offerings constitute illegal sports betting operations without proper Nevada licensing.
According to gaming attorney Daniel Wallach, the path is now clear for Nevada to impose a temporary restraining order. Because Nevada law prohibits appealing a TRO, Kalshi would be forced to suspend state operations for no less than two weeks.
https://twitter.com/WALLACHLEGAL/status/2034674972522680587?s=20
“Since a TRO is not appealable under Nevada law, Kalshi would be required to exit the state in the interim,” Wallach explained.
Kalshi contested the action in federal court, asserting that its contract offerings fall exclusively under Commodity Futures Trading Commission authority. The company claimed that any prohibition would inflict “imminent harm” on its business operations.
The dispute now heads back to federal court as Nevada proceeds with its enforcement measures.
Kalshi Highlights Risk of Contradictory Judicial Outcomes
In a legal filing dated March 13, Kalshi argued that permitting Nevada to enforce its order while federal proceedings remain ongoing creates substantial risk of conflicting legal determinations.
Kalshi contended that parallel proceedings in state and federal courts might yield “exactly the opposite conclusion” regarding whether federal commodities regulations supersede state gambling statutes. The platform cautioned this scenario could “create jurisdictional chaos.”
At the heart of the matter lies a fundamental question: which authority holds supremacy—federal commodity market regulators or state gaming commissions?
Nationwide Regulatory Campaign Expands Beyond Nevada
Nevada’s enforcement action is part of a broader pattern. Connecticut, New York, New Jersey, and additional states have initiated comparable measures targeting sports-event contracts provided by prediction market operators.
Kalshi isn’t alone in facing regulatory scrutiny. Crypto.com, Polymarket, and Coinbase are embroiled in similar legal conflicts with state authorities across multiple jurisdictions over comparable offerings.
Prediction markets have experienced explosive expansion. Weekly transaction volumes on platforms such as Kalshi and Polymarket consistently exceed $2 billion, based on Dune Analytics data.
This rapid growth has attracted attention from state legislators worried about potential insider trading schemes and market manipulation risks.
Throughout these legal challenges, Kalshi has consistently argued that state regulators lack jurisdiction to interfere with federally supervised event contracts.
The critical next phase involves a preliminary injunction hearing, which will decide whether Kalshi can restart Nevada operations while the comprehensive legal battle unfolds.
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