Key Takeaways
- A Nevada district court granted a 14-day temporary restraining order blocking Kalshi’s operations on Friday
- The ban prohibits Kalshi from offering sports, entertainment, and political election markets within Nevada
- Nevada’s Gaming Control Board initially demanded Kalshi cease sports-related contracts in 2025
- Federal regulators at the CFTC are claiming exclusive jurisdiction, creating conflict with state authorities
- Arizona prosecutors filed criminal charges against Kalshi for operating without proper licensing this week
Kalshi, a prominent prediction market operator, must immediately cease operations in Nevada following a court-issued restraining order. Nevada’s First Judicial District Court handed down the directive on Friday, March 20.
Kalshi was temporarily barred by a judge from offering its prediction market contracts in Nevada, after state regulators said the company didn’t have a gaming license. https://t.co/in8URVlJWj
— Bloomberg (@business) March 20, 2026
The judicial order specifically targets the platform’s sports wagering, entertainment-based markets, and election prediction contracts. The court has scheduled a subsequent hearing for April 3 to review the matter further.
This legal confrontation has been brewing for months. Nevada’s Gaming Control Board originally sent Kalshi a cease-and-desist notice in 2025, demanding the company discontinue all sports-related event contracts offered to Nevada residents.
Kalshi contested the state’s action, maintaining that its federal regulatory status supersedes state-level jurisdiction. The company attempted to transfer the proceedings to federal court.
That 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 case to Nevada state court.
The Nevada judge determined that the gaming board’s regulatory functions are compromised while Kalshi operates without state licensing. According to the court’s reasoning, an “unlicensed participant beyond the Board’s control” prevents the regulatory body from fulfilling its statutory obligations.
Kalshi representatives chose not to provide a statement regarding the Nevada court decision.
Federal Regulator Asserts Jurisdiction
On the federal front, Michael Selig, Chair of the U.S. Commodity Futures Trading Commission, has been actively challenging state enforcement actions. He submitted legal briefs contending that the CFTC possesses sole regulatory authority over prediction market platforms, not individual states.
Selig has articulated this position at multiple industry conferences and committed to maintaining the agency’s jurisdictional claims. The CFTC recently released regulatory guidance clarifying that platforms offering event-based derivative contracts must comply with Commodity Exchange Act requirements.
Major League Baseball has aligned itself with the federal regulatory framework, executing a memorandum of understanding with the CFTC regarding prediction market supervision. Additionally, MLB announced a collaborative agreement with Polymarket this week.
Multi-State Enforcement Actions
Nevada isn’t alone in pursuing legal action against Kalshi. Arizona’s attorney general filed criminal charges against the platform earlier this week, alleging operation of an unlicensed gambling enterprise and offering prohibited election wagering.
Tennessee has similarly initiated legal proceedings against prediction market platforms concerning sports event contracts.
Federal legislators have also expressed concerns. In January, Democratic Representative Ritchie Torres proposed legislation restricting how government officials engage with prediction markets, sparked by wagering activity related to former Venezuelan President Nicolás Maduro’s potential arrest.
Last week, Democratic members of Congress unveiled the “Death Bets Act,” proposed legislation that would prohibit prediction market contracts based on death, armed conflict, or assassination events.
The Nevada court acknowledged that federal preemption questions in this regulatory space are “nuanced and rapidly evolving.”
The Nevada case will reconvene on April 3, 2026.
