Appeals Court Allows Nevada to Enforce Restriction on Kalshi

A federal appeals court has denied Kalshi’s emergency request to block Nevada state enforcement, clearing the way for a temporary restraining order (TRO) against the prediction market platform. The decision allows Nevada regulators to prevent Kalshi from offering sports event contracts in the state.

Temporary Restriction and Legal Implications

Gaming lawyer Daniel Wallach said the TRO appears imminent and would require Kalshi to cease operations in Nevada for at least 14 days until a preliminary injunction hearing. Under Nevada law, a TRO cannot be appealed, meaning Kalshi must exit the state during this period. The Nevada Gaming Control Board issued a cease-and-desist in March, stating the contracts constitute unlicensed sports betting.

Federal vs. State Jurisdiction Conflict

Kalshi has argued that its event contracts fall under federal jurisdiction via the Commodity Futures Trading Commission and warned that enforcement by Nevada could cause “imminent harm.” The company also cited the risk of conflicting rulings between state and federal courts, potentially creating jurisdictional confusion over whether federal commodities law preempts state gambling regulations.

Prediction markets, including Kalshi, have seen weekly trading volumes exceed $2 billion, drawing heightened scrutiny from multiple states over sports-event contracts.

Disclaimer

This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.