Quick Overview
- A Nevada court granted a 14-day temporary restraining order against Kalshi on Friday, March 20
- The directive suspends Kalshi’s sports, entertainment, and election-based event contracts within Nevada
- Nevada’s Gaming Control Board initially ordered Kalshi to cease sports contracts earlier in 2025
- A jurisdictional battle is brewing between the CFTC’s federal oversight claims and state regulatory bodies
- Arizona prosecutors filed charges against Kalshi this week for operating without proper gambling licenses
The prediction market operator Kalshi must cease offering its event-based contracts in Nevada for a minimum of two weeks following a court decision. Nevada’s First Judicial District Court granted the temporary restraining order last Friday, March 20.
The judicial order applies to all sports-related, entertainment-focused, and election-prediction contracts available through the platform. Court proceedings will resume on April 3 for further deliberation.
This legal confrontation has been developing over time. Nevada’s Gaming Control Board initially delivered a cease-and-desist directive to Kalshi in 2025, demanding the platform discontinue its sports-related event contracts throughout the state.
Kalshi contested this action, maintaining that federal regulation governs its operations and should supersede state-level jurisdiction. The company attempted to transfer the proceedings to federal court.
This strategy was unsuccessful. The U.S. Court of Appeals for the Ninth Circuit rejected Kalshi’s stay motion on Thursday and returned the matter to Nevada state jurisdiction.
The Nevada judge determined that the gaming board’s regulatory responsibilities are compromised while Kalshi continues operations without state licensing. According to the court’s finding, an “unlicensed participant beyond the Board’s control” prevents the regulatory body from fulfilling its statutory obligations.
Kalshi has not issued a statement regarding the Nevada court’s decision.
Federal Regulator Enters the Fray
On the federal front, Commodity Futures Trading Commission Chair Michael Selig has actively challenged state-level enforcement actions. He submitted a legal brief asserting that the CFTC, rather than individual states, possesses proper regulatory authority over prediction market platforms.
Selig has repeatedly articulated this position at various public forums and committed that his agency will maintain its jurisdictional claims. The CFTC has additionally issued guidance documents reminding platforms that offer event-based contracts of their obligations 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 simultaneously revealed a distinct partnership agreement with Polymarket this week.
Growing State-Level Enforcement
Nevada isn’t alone in pursuing legal action against Kalshi. This week, Arizona’s attorney general filed criminal charges against the company, alleging operation of an unlicensed gambling enterprise and facilitating illegal election wagering.
Tennessee has similarly initiated legal proceedings against prediction market platforms concerning sports-event contracts.
Federal legislators have also expressed regulatory concerns. Democratic Representative Ritchie Torres introduced legislation in January aimed at restricting elected officials’ participation in prediction markets, prompted by wagering activity related to former Venezuelan President Nicolás Maduro’s potential capture.
Last week, Democratic members of Congress unveiled the “Death Bets Act,” proposing to prohibit prediction market contracts connected to death, armed conflict, or assassination.
The Nevada court acknowledged that federal preemption questions in this regulatory sphere remain “nuanced and rapidly evolving.”
The Nevada case returns to court on April 3, 2026.
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