Kalshi ordered to geofence Nevada after court ruling
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- A Nevada judge granted a preliminary injunction against Kalshi on April 3, extending a sports market ban first imposed by TRO on March 20.
- The ruling came a day after the CFTC sued Arizona, Connecticut, and Illinois to assert exclusive federal authority over prediction markets.
- Kalshi faces active legal challenges in over a dozen states, including criminal charges in Arizona and a civil lawsuit in Washington.
A Nevada state judge has moved to make a temporary ban on prediction market operator Kalshi durable in scope, granting a preliminary injunction on April 3 that bars the company from offering sports, entertainment, and election-related contracts in the state without a gaming license.
Judge Jason Woodbury of the First Judicial District Court in Carson City said at the close of a hearing that he would issue the preliminary injunction sought by the Nevada Gaming Control Board.
He extended an earlier 14-day temporary restraining order issued on March 20 — which barred the offering of sports, election, and entertainment-related contracts — through April 17, to allow time to finalize the terms of a longer-term injunction.
The court gave Kalshi until May 4 to implement geofencing or geolocation controls to prevent Nevada users from accessing its platform.
Swaps vs bets
A lawyer for New York-based Kalshi argued the contracts constitute “swaps” falling under the exclusive jurisdiction of the US Commodity Futures Trading Commission, a position the CFTC has itself adopted in related litigation. Woodbury rejected the argument.
The judge said buying a contract on a baseball game on Kalshi was “indistinguishable” from placing a bet on a state gaming platform, stating:
“So I find based on the arguments that have been presented that it is a gaming activity that is prohibited for any non-licensee to engage in.”
Mike Dreitzer, chairman of the Nevada Gaming Control Board, said following the ruling that he was “very pleased with today’s ruling” and would “continue to vigorously enforce Nevada law to safeguard gaming” in the state.
In the board’s original TRO statement on March 20, Dreitzer had said:
“Prediction markets, to the extent they facilitate unlicensed gambling, are illegal in Nevada, and we have a statutory duty to protect the public. We want people in the state to wager safely at a licensed book.”
Tarek Mansour, chief executive officer of Kalshi, said:
“We are disappointed in the court’s decision, but we will continue to work with regulators to find a path forward.”
A company under pressure
The Nevada ruling is the sharpest blow yet in a sustained multi-state legal campaign. Nevada remains the only state with a court-enforced, active ban against Kalshi, and the decision lays out in clear language a framework other states can use as a model.
Over a dozen lawsuits and cease-and-desist actions were pending across the country as of mid-March 2026.
Washington Attorney General Nick Brown filed a civil lawsuit against Kalshi on March 27, alleging it violated the state’s Gambling Act, Consumer Protection Act, and Recovery of Money Lost at Gambling Act.
Washington has banned online gambling since 2006. Arizona became the first US state to pursue criminal charges, with AG Kris Mayes filing 20 misdemeanor counts against the company in March. Kalshi had previously filed a preemptive federal lawsuit against Arizona arguing CFTC authority supersedes state gambling law.
Adding a further layer of complexity, a November 2025 USPTO trademark application by Kalshi for the term “prediction market” listed its product as associated with bookmaking services and sports betting tournaments, a filing state regulators have cited in their enforcement arguments. The USPTO rejected the initial application; Kalshi received a three-month extension to refile in March 2026.
The company’s commercial ambitions have not slowed. Kalshi processed $800m in traded volume across the opening weekend of the men’s and women’s NCAA tournaments in March, nearly doubling its total volume across the entire 2025 event. Its annual revenue run rate currently stands at approximately $1.5bn.
Multi-front legal war
The CFTC sued Arizona, Connecticut, and Illinois on April 2, challenging each state’s efforts to regulate prediction market operators including Kalshi and Polymarket. The Trump administration’s lawsuits ask federal courts to declare that applying state gambling laws to these markets is unconstitutional.
A Massachusetts injunction blocking Kalshi from offering sports event contracts in that state is on hold pending appeal. Courts in New Jersey and Tennessee have sided with Kalshi by temporarily blocking state enforcement, while Massachusetts and Ohio have backed their respective regulators. The split leaves the central jurisdictional question unresolved.
The geofencing requirement deals a further blow to Kalshi’s defense, given the company had argued across multiple cases that such measures would be prohibitively expensive. A Ninth Circuit hearing is scheduled for April 16. The outcome will be watched closely by licensed operators who pay state taxes and compliance costs that prediction markets currently avoid.
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