Nevada court forces Kalshi shutdown in landmark ruling
- A Nevada state court issued a 14-day temporary restraining order against Kalshi on March 20, blocking the platform from offering sports, election, and entertainment contracts in the state.
- First Judicial District Court Judge Jason Woodbury ruled the Nevada Gaming Control Board has a strong likelihood of prevailing in its broader legal challenge.
- The order is the first time a US state has secured a court-ordered halt on Kalshi’s in-state operations, with a preliminary injunction hearing set for April 3.
A Nevada court has ordered prediction market platform Kalshi to suspend all event contract activity in the state for at least two weeks, in the sharpest enforcement action any US state has taken against the company to date.
First Judicial District Court Judge Jason Woodbury issued the 14-day temporary restraining order on March 20, directing Kalshi to stop offering contracts tied to sports, elections, and entertainment without first obtaining the required state licenses.
The ruling followed a federal appeals court decision the day before denying Kalshi’s bid to block Nevada’s enforcement action.
Regulator’s case prevails
The Nevada Gaming Control Board had sought the restraining order as part of its ongoing civil enforcement action.
Regulators argued that Kalshi failed to acquire the gaming licenses required under state law and that, by allowing users under 21 to access its services, the platform violated Nevada statute.
Judge Woodbury sided with regulators, writing that the Gaming Control Board has a strong likelihood of prevailing on the merits. He emphasized that Nevada’s expansive gambling framework serves the public interest and that harm from unlicensed operations would be irreparable.
The order found that Kalshi was not licensed under the Nevada Gaming Control Act. Given Kalshi’s policy of taking a commission from contracts on its platform, the court found the company was operating a “percentage game,” which Nevada defines as gambling.
Nevada Gaming Control Board Chairman Mike Dreitzer said:
“Kalshi has repeatedly stated that its operations are legal in 50 states, which is clearly not true. 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.”
CFTC preemption rejected
Kalshi has consistently maintained that its products are financial instruments regulated at the federal level by the Commodity Futures Trading Commission (CFTC), placing them outside state gambling jurisdiction. Judge Woodbury rejected that argument.
CFTC Chairman Michael Selig has argued that the commission holds primary federal authority over certain prediction market products, including event contracts treated as swaps under the Commodity Exchange Act. Selig has stated publicly that the CFTC will push back against state enforcement efforts in this area.
That position sets up a direct conflict with state-level regulators. Nevada has also secured temporary restraining orders against other prediction market platforms, including Polymarket and Coinbase, as part of a broader effort to bring unlicensed operators under state gaming law.
The Nevada Gaming Control Board said the Kalshi order means it has successfully restricted the operation of all unlicensed prediction markets that had been known to be operating in Nevada.
For the duration of the 14-day TRO, Kalshi must comply with the shutdown while the case proceeds. Any appeal would not immediately suspend the order. A preliminary injunction hearing is scheduled for April 3 in Carson City.
Some legal analysts say the dispute could eventually reach the US Supreme Court if the underlying jurisdictional question remains unresolved.
Pressure increases across states
The Nevada ruling is not an isolated development. On March 17, Arizona Attorney General Kris Mayes filed 20 misdemeanor criminal counts against Kalshi in Maricopa County Superior Court.
The charges are the first criminal counts any state has brought against the company, accusing it of operating an illegal gambling business by accepting wagers on elections, college sports, and player performances.
Mayes stated:
“No company gets to decide for itself which laws to follow.”
Similar restrictions have been imposed in Massachusetts. Kalshi is also facing state-level lawsuits and investigations in multiple jurisdictions, with regulators broadly arguing that the platform is offering sports betting under a different name.
The company has filed preemptive suits of its own in Arizona, Iowa, and Utah, seeking to establish CFTC oversight as the governing authority.
Despite the mounting legal pressure, Kalshi is reportedly raising approximately $1 billion at a valuation of around $22 billion, underscoring continued investor appetite for the sector even as regulatory risk intensifies.
Some legal and regulatory analysts say the Nevada case could carry significant implications beyond the state’s borders. If state courts continue to side with regulators and the dispute reaches the Supreme Court, the outcome could determine whether prediction market operators are able to function under a single national framework or must seek licensing in each state where they accept users.
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