Key Highlights
- A temporary restraining order from Nevada’s First Judicial District Court was issued against Kalshi on Friday, lasting 14 days
- Kalshi must cease offering sports, entertainment, and election-related contracts within Nevada
- Nevada’s Gaming Control Board initially ordered Kalshi to discontinue sports contracts in 2025
- A jurisdictional battle is underway between the CFTC and state authorities over prediction market oversight
- Kalshi faces additional charges in Arizona for operating without a gambling license
A Nevada court has mandated that prediction market operator Kalshi suspend its event contract offerings within the state for a minimum of two weeks. On Friday, March 20, the First Judicial District Court of Nevada handed down this temporary restraining order.
The judicial order encompasses all sports-related, entertainment, and election wagering contracts available through the platform. A subsequent court hearing has been calendared for April 3.
This legal conflict has been ongoing. Nevada’s Gaming Control Board initially sent a cease-and-desist directive to Kalshi in 2025, demanding the platform discontinue all sports-related event contracts operating within state boundaries.
Kalshi contested this action, maintaining that its federal regulatory oversight should take precedence over state-level jurisdiction. The platform 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 request for a stay on Thursday and remanded the matter to Nevada’s state court system.
The Nevada judge determined that the gaming board’s regulatory functions are compromised while Kalshi continues operations without obtaining a state license. The ruling stated that an “unlicensed participant beyond the Board’s control” interferes with the board’s statutory responsibilities.
Kalshi has not issued a statement regarding the Nevada decision.
Federal Regulator Asserts Authority
On the federal front, U.S. Commodity Futures Trading Commission Chair Michael Selig has been actively challenging state enforcement actions. He submitted a legal brief contending that the CFTC, rather than individual states, possesses proper regulatory authority over prediction market platforms.
Selig has reiterated this position during multiple public appearances and has committed that his agency will maintain its jurisdictional claims. The CFTC has additionally issued regulatory guidance informing exchanges that list event contracts that compliance with the Commodity Exchange Act is mandatory.
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 collaborative arrangement with Polymarket this week.
Escalating State Actions
Nevada represents just one jurisdiction taking action against Kalshi. Earlier in the week, Arizona’s attorney general filed charges against the company for conducting an unlicensed gambling operation and facilitating illegal election betting.
Tennessee has similarly initiated legal proceedings against prediction market platforms concerning sports-related contracts.
Federal legislators have also expressed concerns. In January, Democratic Representative Ritchie Torres proposed legislation to restrict how elected officials engage with prediction markets, prompted by wagers placed on the potential capture of former Venezuelan President Nicolás Maduro.
Last week, Democratic lawmakers unveiled the “Death Bets Act,” proposing a prohibition on prediction market contracts related to death, armed conflict, or political assassination.
The Nevada court acknowledged that federal preemption questions in this regulatory space are “nuanced and rapidly evolving.”
The upcoming hearing in the Nevada proceedings is scheduled for April 3, 2026.
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