Get 125% / $2,500 on 1st deposit!
New players only. Exclusive Welcome Bonus of up to $2,500
Kalshi hit a major roadblock in Nevada after a federal judge reversed course on a ruling that once protected the prediction market from local gaming regulators. A dispute that began with a cease-and-desist letter has now shifted into a deeper legal fight over who gets to police event contracts in the United States.
Good to Know
Earlier in the year, Kalshi convinced U S District Court Chief Judge Andrew Gordon to block Nevada regulators from taking action. His April order accepted the argument that the Commodity Futures Trading Commission held exclusive authority over Kalshi’s contracts. Those markets include sports-based questions, which prediction platforms have used as the foundation for nationwide sports event trading.
On Monday, Gordon walked back that position. After denying a similar injunction request from Crypto.com in October, he revisited Kalshi’s case and overturned his own earlier conclusion.
He wrote:
“Kalshi relies on a strained reading of the already convoluted Commodities Exchange Act in an attempt to evade state regulation. Kalshi’s interpretation would require all sports betting across the country to come within the jurisdiction of the CFTC rather than the states and Indian tribes. That interpretation upsets decades of federalism regarding gaming regulation, is contrary to Congress intent behind the CEA, and cannot be sustained.”
The dissolved injunction reopens the door for Nevada authorities to pursue criminal enforcement. Regulators had previously accused Kalshi of operating an unlicensed sports betting business based on the company’s sports event contracts.
The reversal created immediate friction. Kalshi filed for a stay on Tuesday, arguing it now faces “imminent criminal enforcement” from Nevada. The company told the court that regulators left “little doubt” they would bring charges unless the order is paused.
Kalshi also said that even if it could avoid prosecution by geofencing Nevada users, shutting off access would inflict “severe irreparable harm” because open contracts would have to be closed for Nevada customers. That same scenario played out for Crypto.com after its injunction request failed.
Kalshi plans to file a notice of appeal, kicking off another round of litigation over how prediction markets fit into the country’s patchwork of gambling laws.
Disputes like this are showing up across the country as regulators and prediction platforms battle over how much authority the CFTC truly has. Event contracts—ranging from sports outcomes to election results to economic indicators—can be traded on federally supervised exchanges. Because many of those contracts function like simple wagers, state regulators argue prediction companies are crossing into sports betting without licenses.
Judge Gordon highlighted that tension directly. He wrote:
“Kalshi has established a market for sports betting. Kalshi advertised that it is the ‘first app for legal sports betting in all 50 states.’ But Kalshi is not licensed to conduct gaming in Nevada or any other state.”
Despite that criticism, Gordon acknowledged that Kalshi raised “serious questions” about whether some form of relief might be appropriate. Still, he concluded that the balance of hardships favored the Nevada Gaming Control Board and that dissolving the injunction aligned with the public interest.
Kalshi filed for a stay and plans to appeal, arguing it faces imminent criminal enforcement in Nevada.
Nevada regulators sent Kalshi a cease-and-desist letter accusing it of running an unlicensed sports betting operation.
Prediction markets offer sports and election contracts that function like wagers. State regulators argue those markets fall under their authority, not federal derivatives law.
Yes. Without a stay, Kalshi may need to block Nevada access and close active contracts, similar to the Crypto.com situation.
He noted there are “serious questions” on the merits but still found the balance of hardships favoring the state.