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Gaming Edge’s TL;DR
- A federal judge has remanded lawsuits from Kalshi and Polymarket over Nevada’s attempts to block sports-event contracts back to state court, but both platforms immediately filed appeals.
- This fight will determine whether prediction markets must geofence or halt sports offerings in Nevada and could set wider precedent for state versus federal oversight.
- Expect continued legal moves from both sides as courts weigh Commodity Exchange Act pre-emption claims, temporary restraining orders, and the practical impact on access for American users.
Judge Miranda Du of the US District Court for Nevada ordered that the Nevada Gaming Control Board (NGCB) actions against Kalshi and Polymarket be heard in the First Judicial Court of Carson City.
Polymarket already has a temporary restraining order (TRO) that blocks access in Nevada; Kalshi remains available nationwide but faces a pending TRO in Nevada that could force it to halt operations in the Silver State for the first time.
The federal court rejected Kalshi’s arguments that the Commodity Exchange Act (CEA) completely pre-empts state law and that the federal-question doctrine required a federal forum. Polymarket’s claim that it was acting as a federal officer was likewise dismissed. Both companies have filed for administrative stays and appeals to the Ninth Circuit while Nevada seeks immediate ex parte relief in state court.
Supreme Court could eventually hear case
The immediate risk is regional access loss. If Nevada’s TROs are granted and upheld, Kalshi could be forced to geofence or suspend sports contracts for Nevada users, matching Polymarket’s already-blocked status.
That raises broader questions about how prediction markets will comply with a patchwork of state gaming laws while remaining aligned with Commodity Futures Tarding Commission expectations on impartial access. Operators face financial and operational costs from geofencing and possible loss of liquidity in constrained markets; smaller events or niche contracts may become unviable if platforms must limit states.
Regulators and operators will also watch whether courts treat Kalshi’s CEA pre-emption claims as strong precedent – a federal win would shield markets from some state enforcement, while a loss reinforces states’ power to police gambling-related offerings.
Both firms have requested administrative stays pending a Ninth Circuit review, and Kalshi continues other stay efforts. If the Ninth Circuit denies relief, Kalshi could seek emergency relief from the US Supreme Court to halt state TROs while appeals proceed.
Based on reporting by Daniel O’Boyle for InGame.
