A court in Nevada has ruled to keep Kalshi out of the state’s event-contract market as the legal battle continues, siding with state regulators in an early but significant decision.
Summary
A Nevada judge backed regulators, stating Kalshi’s event contracts closely resemble sports betting.
The ruling extends Kalshi’s ban in the state through April 17 while further legal review continues.
The case intensifies the broader conflict between state gambling laws and federal oversight claims over prediction markets.
The decision followed a request from the Nevada Gaming Control Board, which asked the court to block Kalshi from offering contracts linked to sports, elections, and entertainment outcomes.
At the heart of the dispute is whether prediction market contracts should be treated as financial instruments under federal law or as gambling under state regulations. Kalshi maintains that its products qualify as financial derivatives, while Nevada regulators argue they function as betting activity.
Nevada court keeps ban in place
During a hearing in Carson City, Judge Jason Woodbury granted a preliminary injunction against Kalshi. The order prevents the company from allowing Nevada residents to trade event contracts without a proper gaming license.
This ruling extends a temporary restraining order issued on March 20, which will now remain in effect through April 17 as the case proceeds.
Kalshi had argued that its contracts are “swaps” regulated by the Commodity Futures Trading Commission (CFTC), asserting that federal oversight should apply. However, the court rejected this argument.
According to reports, Judge Woodbury stated that purchasing contracts tied to the outcome of events is effectively no different from placing bets through a sportsbook, noting that the activity is “indistinguishable.”
State regulators gain early advantage
The decision marks the first active, court-enforced state-level ban against Kalshi, giving Nevada an early legal edge as more states scrutinize prediction markets.
Utah has also taken action, recently passing legislation that classifies proposition-style bets on in-game events as gambling. The law aims to restrict similar offerings from platforms like Kalshi and Polymarket.
Meanwhile, the CFTC continues to defend its authority over prediction markets. Its chairman, Michael Selig, recently stated that the agency is prepared to fight in court to protect its jurisdiction.
Selig also described prediction markets as “truth machines,” arguing that markets where users risk money on outcomes can provide more accurate signals than traditional opinion polls—further highlighting the growing tension between federal regulators and state gaming authorities.
