Nevada gaming regulators are seeking to bar prediction market operator Kalshi from offering sports-related event contracts in the state, following a ruling from the 9th US Circuit Court of Appeals that clears the way for enforcement action.
In a one-page decision Tuesday, the appeals court upheld a November order dissolving an injunction that had previously prevented Nevada authorities from pursuing enforcement against the company. The ruling allows the Nevada Gaming Control Board to proceed with efforts to halt Kalshi’s operations tied to sports contracts.
Later that day, the board filed a civil enforcement action in Carson City District Court to block Kalshi from offering what it characterizes as unlicensed wagering. According to the filing, Kalshi is currently the only prediction market offering unlicensed wagering in Nevada.
“Its continued operation harms the state and the public every day and poses an existential threat to the state’s gaming industry,” Jessica Whalen, chief deputy solicitor general for the attorney general’s office, wrote in the filing. “Kalshi has continued to dramatically expand its business, rather than attempting to maintain any kind of status quo.”
Control board Chairman Mike Dreitzer said in a statement that the agency “continues to vigorously fulfill its obligation to safeguard Nevada residents and gaming patrons, and uphold the integrity of a thriving gaming industry.”
Jurisdictional dispute intensifies
The lawsuit forms part of a national legal dispute over whether prediction market platforms fall under state gambling laws or the authority of the Commodity Futures Trading Commission (CFTC).
On the same day Nevada filed its action, the CFTC submitted a brief in related litigation supporting companies such as Kalshi, arguing that it has exclusive jurisdiction over prediction markets. Representatives of the federal regulator have maintained that its oversight permits companies like Kalshi to operate in all 50 states, including jurisdictions where traditional gambling is prohibited.
Kalshi contends its event contracts are a form of swaps, a type of derivative contract, and therefore subject to federal commodities regulation rather than state gaming laws. Shortly after Nevada filed its case, Kalshi sought to have the matter transferred to federal court, arguing that the dispute centers on whether it falls under the CFTC’s exclusive jurisdiction.
Florida-based gaming attorney Daniel Wallach wrote on X that Kalshi’s next step could include seeking an administrative order from the US Supreme Court that would allow it to continue operating in Nevada while the case proceeds.
State enforcement expands
Nevada regulators argue that offering sports event contracts constitutes wagering under state law and requires licensure. In its lawsuit, the state said Kalshi had not complied with gaming regulations, including prohibitions on anyone under 21 placing wagers and requirements to deploy safeguards against insider betting and match fixing.
The Nevada Gaming Control Board first issued a cease-and-desist order to Kalshi in March last year. Since then, regulators in more than 20 states have initiated legal challenges against prediction market companies, temporarily blocking the offering of sports contracts in several jurisdictions.
If Nevada succeeds, it would become the second state to secure a court order blocking Kalshi from offering sports event contracts. In Massachusetts, a judge on February 5 issued an injunction at the request of the state’s attorney general, though a state appeals court justice has put that order on hold pending appeal.
Nevada courts have also issued orders barring two other prediction market operators, Coinbase and Polymarket, from offering event contracts in the state.
Kalshi said more than $1 billion in volume traded on the Super Bowl, with roughly 90% of its trading volume tied to sports. Approximately half of Polymarket’s trading activity is linked to sports.
Original article: https://www.yogonet.com/international/news/2026/02/18/117662-nevada-appeals-court-clears-path-for-enforcement-against-kalshi-39s-sports-contracts
