A Nevada state judge has stepped in to temporarily block parts of Kalshi’s business, escalating a fast-moving fight over how prediction markets should be regulated.
The First Judicial District Court granted a temporary restraining order requested by the Nevada Gaming Control Board, forcing Kalshi to halt contracts tied to sports, elections, and entertainment events within the state. Regulators argued those offerings amount to unlicensed wagering, and the court agreed.
The ruling follows earlier action by the state, including a cease-and-desist letter warning Kalshi to stop operating without proper authorization. When the company didn’t comply, Nevada moved the dispute into court.
Nevada says Kalshi operating illegally as judge blocks contracts
State regulators said that Kalshi’s model crosses into gambling under Nevada law. They say any such activity must run through licensed operators, not a federally regulated exchange acting independently.
“The Court has ordered Kalshi to immediately stop its unlicensed gaming activities,” the Board stated in a statement.
Chairman Mike Dreitzer also challenged Kalshi’s broader messaging about legality across the country, saying, “Kalshi has repeatedly stated that its operations are legal in 50 states, which is clearly not true.”
Behind the scenes, the legal path has already twisted through multiple courts. Kalshi attempted to shift the fight into federal jurisdiction, but a federal judge sent the case back to state court. Another federal ruling denied Kalshi’s request to pause enforcement while the case plays out, leaving the restrictions in place for now. The company has also taken parts of the dispute to a federal appeals court, signaling a longer legal battle ahead.
Kalshi calls move ‘unprecedented’
Kalshi quickly notified Nevada users about the changes after the ruling took effect. In an email, the company said that “due to a temporary court order,” affected markets would no longer be available locally.
Users can still manage what they already hold, but “won’t be able to buy new contracts” in those categories. Other offerings, including crypto, weather, and global news markets, remain open.
The company framed Nevada’s move as an outlier, writing that the state is “currently the only state with temporary restrictions in effect due to a court order,” while stating it plans to keep fighting.
Nevada regulators see little distinction between betting and event-based contracts when outcomes hinge on sports or elections.
Kalshi, meanwhile, continues to argue it operates as a federally regulated exchange offering derivatives, not traditional gambling products. This is increasingly being tested as more states examine the platform.
Legal gaming expert Daniel Wallach says: “Nevada goes from the first state to be preliminarily enjoined by Kalshi to the first state to obtain and enforce injunctive relief against Kalshi.”
Featured image: Kalshi / Canva
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