Nevada Files Lawsuit Against Kalshi After Appeals Court Ruling on Its Side

Nevada has filed a civil enforcement lawsuit against Kalshi after a federal appeals court allowed state regulators to proceed with action over sports event contracts offered in the state. Filing follows a ruling by the US Court of Appeals for the Ninth Circuit that denied Kalshi request to block enforcement.

Good to Know

• Ninth Circuit removed a block that had paused Nevada enforcement action
• Nevada Gaming Control Board filed a civil suit seeking to stop unlicensed wagering
• Kalshi argues it falls under exclusive federal oversight through the CFTC

Legal tension between state gaming authorities and federally regulated prediction markets has intensified. After the appeals court ruling on Tuesday, Nevada Gaming Control Board moved quickly, filing a civil enforcement action in state court. Filing seeks to prevent Kalshi from offering what the regulator describes as unlicensed sports wagering in Nevada.

Regulator stated action aims to block the company “from offering unlicensed wagering in violation of Nevada law.” Position from Nevada centers on classification. According to the complaint, sports event contracts offered by Kalshi allow “users to wager on the outcomes of sporting events,” which in the view of the regulator requires a Nevada gaming licence.

Despite making wagers and enabling access to sports related contracts within Nevada, Kalshi does not hold a state licence and does not comply with Nevada gaming statutes, regulator argued in its filing.

Company responded quickly. Kalshi filed a motion to move the dispute into federal court, repeating a core argument used throughout the past year. Filing states Kalshi is “subject to exclusive federal jurisdiction” under oversight of the Commodity Futures Trading Commission.

Conflict traces back nearly a year. In March last year, Nevada issued a cease and desist order directing Kalshi to halt all sports related markets in the state. In April, a federal court temporarily blocked Nevada from taking enforcement steps while litigation moved forward. That temporary relief has now shifted after the Ninth Circuit decision.

Appeals court order removes a key procedural shield that had prevented Nevada from escalating enforcement. Broader legal fight remains unresolved, especially as similar actions have surfaced in other states examining prediction markets tied to sports outcomes.

In its latest federal motion, Kalshi argued that Nevada position would require the court to “must adopt a narrow interpretation” of federal commodity exchange laws. Company maintains that sports event contracts operate under federal commodities law rather than state gaming frameworks.