A Nevada district court has handed prediction market platform Kalshi a significant legal setback, issuing a 14-day restraining order that bars the company from offering sports, entertainment and election contracts in the state.
The First Judicial District Court of Nevada issued the order on Friday, March 20, following a federal appeals court ruling the day before that sent the case back to state jurisdiction. Kalshi had sought to keep the matter in federal court, arguing it faced "imminent harm" from state action, but the appeals court rejected that position.
The Nevada Gaming Control Board, which first demanded Kalshi cease its sports contracts in 2025, had sought the restraining order on the grounds that an unlicensed operator obstructs the board's ability to fulfil its statutory functions. The state court agreed. A follow-up hearing is scheduled for April 3. The Wall Street Journal reported that Kalshi must obtain state gambling licenses and prohibit users under 21 to continue operating in Nevada.
The Nevada action is one front in a widening legal campaign against the company. Arizona's attorney general this week charged Kalshi with running an unlicensed gambling business and offering illegal election wagering. A Kalshi spokesman declined to comment.
The central legal question is whether federal or state authority governs prediction market platforms. CFTC Chairman Brian Quintenz's successor, Mike Selig, has filed a court brief asserting that his agency holds proper jurisdiction and has pledged to contest state-level actions. Federal regulation generally supersedes state law, but the courts have yet to resolve the jurisdictional question definitively.
Major League Baseball has aligned with the federal position, signing a memorandum of understanding with the CFTC on prediction market oversight and separately partnering with rival platform Polymarket.
