Kalshi Hit With Nevada Ban as Prediction Markets Face Legal Battle

TLDR

• Nevada’s First Judicial District Court issued a 14-day temporary restraining order against Kalshi on Friday
• The order halts Kalshi’s sports, entertainment, and election contracts in the state
• The Nevada Gaming Control Board first told Kalshi to stop sports contracts in 2025
• The CFTC is asserting federal authority over prediction markets, clashing with state regulators
• Arizona charged Kalshi with running an unlicensed gambling business earlier this week

Prediction market platform Kalshi has been ordered to stop offering event contracts in Nevada for at least two weeks. The First Judicial District Court of Nevada issued the temporary restraining order on Friday, March 20.

The order covers sports, entertainment, and election contracts on the platform. A follow-up hearing is scheduled for April 3.

The dispute is not new. The Nevada Gaming Control Board first issued a cease-and-desist to Kalshi in 2025, telling the company to stop offering sports-based event contracts in the state.

Kalshi pushed back, arguing it is regulated at the federal level, which it said should override state authority. The company tried to move the case to federal court.

That effort failed. On Thursday, the U.S. Court of Appeals for the Ninth Circuit denied Kalshi’s motion to stay the case and sent it back to Nevada.

The Nevada judge ruled that the gaming board cannot properly do its job while Kalshi operates without a state license. The court said an “unlicensed participant beyond the Board’s control” obstructs the board’s ability to carry out its legal duties.

Kalshi declined to comment on the Nevada ruling.

CFTC Steps In

At the federal level, U.S. Commodity Futures Trading Commission Chair Michael Selig has been pushing back against state actions. He filed a court brief arguing that the CFTC, not the states, holds proper authority over prediction markets.

Selig has made the same argument at several public events and has promised his agency will continue to assert jurisdiction. The CFTC has also published guidance reminding exchanges that list event-based contracts that they must follow rules under the Commodity Exchange Act.

Major League Baseball has sided with the federal approach, signing a memorandum of understanding with the CFTC on prediction market oversight. MLB also announced a separate partnership with Polymarket this week.

Legal Pressure Mounting

Nevada is not the only state moving against Kalshi. Earlier this week, Arizona’s attorney general charged the company with running an unlicensed gambling business and offering illegal election wagering.

Tennessee has also brought a case against prediction market operators over sports-event contracts.

At the federal level, lawmakers have raised concerns too. In January, Democrat Rep. Ritchie Torres introduced a bill to limit how elected officials interact with prediction markets, following bets placed on former Venezuelan President Nicolás Maduro’s capture.

Last week, Democratic lawmakers introduced the “Death Bets Act,” which would ban prediction market contracts tied to death, war, or assassination.

The Nevada court noted that the question of federal preemption in this area is “nuanced and rapidly evolving.”

The next court date in the Nevada case is set for April 3, 2026.

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