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Nevada regulators have escalated their legal battle against Kalshi, filing a lawsuit in Carson City District Court to shut down the company’s sports event contracts within the state.
The Nevada Gaming Control Board is seeking an immediate temporary restraining order and a permanent injunction. According to a news post by The Guardian, regulators argue Kalshi is offering what amounts to unlicensed sports wagering under Nevada law.
From the state’s perspective, the issue is straightforward: If residents can wager money on the outcome of football or basketball games, it falls under Nevada’s definition of gambling. Any business offering such products must hold a gaming license and comply with the state’s regulatory framework.
Kalshi does not hold a Nevada gaming license. In its filing, the board cited state statutes asserting that sports event contracts qualify as wagering. Regulators also emphasized that Nevada law requires specific safeguards, including age verification and protections against insider betting and match-fixing.
Jurisdiction battle between CFTC and Nevada
Kalshi has pushed back, arguing its event contracts are financial instruments—specifically a form of swaps regulated as derivatives. Under this interpretation, oversight would fall to the Commodity Futures Trading Commission (CFTC) rather than state gaming agencies.
The CFTC weighed in on the same day Nevada filed its lawsuit. In a separate but related case, the federal regulator submitted a brief supporting the position that it maintains exclusive jurisdiction over prediction markets.
This legal dispute has been intensifying for nearly a year. Nevada sent Kalshi a cease-and-desist notice in March 2025, triggering a federal court battle. Kalshi initially won an injunction preventing the state from enforcing its order, though that injunction was later dissolved.
Earlier this week, the U.S. Court of Appeals for the 9th Circuit denied Kalshi’s emergency request for an administrative stay. A broader motion for a stay remains pending. Following Nevada’s state court filing, Kalshi moved to remove the case to federal court, arguing the underlying legal questions are already under federal review.
Lessons from the Massachusetts injunction
Nevada is not the only state challenging Kalshi. Earlier this month, a Massachusetts judge granted the state attorney general’s request for an injunction blocking Kalshi from offering sports contracts. While that order was set to take effect after 30 days, a Massachusetts appeals court has since paused the injunction while Kalshi appeals.
Nevada regulators are monitoring that case closely as they pursue their own enforcement strategy. The state has already secured court orders against other prediction market operators; Coinbase and Polymarket have both faced restrictions in Nevada. Additionally, Crypto.com withdrew its sports contracts from the state last October following regulatory pressure.
High stakes for Nevada’s gaming industry
The complaint underscores a central concern for Nevada: the protection of its gaming industry, which is vital to the state’s economy. Regulators argue that allowing unlicensed entities to offer sports-related contracts undermines the integrity of the system.
Kalshi maintains it operates lawfully in all 50 states under federal oversight. The courts must now decide whether prediction market contracts tied to sporting events are federally regulated derivatives or, as Nevada argues, simply sports wagering that requires a state license.
