Key Points
- A 14-day temporary restraining order was issued against Kalshi by Nevada’s First Judicial District Court on Friday
- The ruling suspends Kalshi’s ability to offer sports, entertainment, and election-related contracts within Nevada
- Nevada Gaming Control Board initially ordered Kalshi to cease sports contracts in 2025
- Federal regulators claim jurisdiction over prediction markets, creating conflict with state-level authorities
- Kalshi faces criminal charges in Arizona for operating without a gambling license, filed this week
A Nevada court has ordered prediction market operator Kalshi to cease its event contract offerings in the state for a minimum of 14 days. The temporary restraining order was handed down Friday, March 20, by the First Judicial District Court of Nevada.
The court’s directive encompasses all sports-related, entertainment, and political election contracts available through the platform. A subsequent court hearing has been set for April 3.
This legal action represents the latest development in an ongoing conflict. Nevada’s Gaming Control Board originally sent a cease-and-desist order to Kalshi in 2025, demanding the platform discontinue its sports-based event contract offerings within state boundaries.
Kalshi challenged this directive, contending that its federal regulatory status should take precedence over state-level jurisdiction. The company attempted to transfer the proceedings to federal court.
That strategy was unsuccessful. Last Thursday, the U.S. Court of Appeals for the Ninth Circuit rejected Kalshi’s request to pause the case and returned jurisdiction to Nevada state courts.
The Nevada judge determined that the gaming board’s regulatory functions are compromised while Kalshi continues operations without obtaining a state license. According to the court, an “unlicensed participant beyond the Board’s control” interferes with the board’s capacity to fulfill its statutory responsibilities.
Kalshi has not issued a statement regarding the Nevada court decision.
Federal Regulator Challenges State Actions
On the federal front, U.S. Commodity Futures Trading Commission Chair Michael Selig has actively contested state regulatory actions. He submitted a court brief maintaining 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 committed to continued assertion of federal jurisdiction. The CFTC has additionally issued guidance clarifying that exchanges offering event-based contracts must comply with Commodity Exchange Act regulations.
Major League Baseball has aligned with the federal regulatory framework, executing a memorandum of understanding with the CFTC regarding prediction market supervision. MLB separately announced a collaboration with Polymarket this week.
Multi-State Legal Challenges Escalate
Nevada isn’t alone in pursuing legal action against Kalshi. Arizona’s attorney general filed charges against the company earlier this week, alleging operation of an unlicensed gambling enterprise and illegal election wagering activities.
Tennessee has similarly initiated legal proceedings against prediction market platforms concerning sports-event contracts.
Federal legislators have also voiced concerns. In January, Democratic Representative Ritchie Torres proposed legislation restricting elected officials’ participation in prediction markets, sparked 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 events.
The Nevada court acknowledged that federal preemption questions in this regulatory area remain “nuanced and rapidly evolving.”
The Nevada case will proceed with its next scheduled court appearance on April 3, 2026.
