Nevada has become the first state in the country to ban prediction market platform Kalshi, obtaining a temporary restraining order on Friday that prohibits the company from offering event contracts related to sports, politics, and entertainment within the state. The ban is set to remain in effect for 14 days. A hearing scheduled for April 3 will determine whether a preliminary injunction should be issued, which could extend the restrictions for several additional months as the case continues through the courts.
The state judge who granted the order noted that the Nevada Gaming Control Board is reasonably likely to prevail on the merits of its case against Kalshi. Mike Dreitzer, chair of the Nevada Gaming Control Board, said in a statement that Kalshi had repeatedly claimed its operations are legal in all 50 states, a position he described as clearly inaccurate. He emphasized that prediction markets facilitating unlicensed gambling are illegal in Nevada and that the board has a statutory duty to protect the public.
Attorney Daniel Wallach, who specializes in sports betting law, noted that a federal hearing in the Ninth Circuit Court of Appeals is scheduled for April 16, which could potentially unwind state court enforcement proceedings. That hearing represents the remaining significant hurdle that could affect the duration of any longer-term ban on Kalshi in Nevada. The Ninth Circuit had already declined earlier this week to prevent Nevada from issuing the initial temporary restraining order, dealing a setback to Kalshi’s efforts to avoid even a short-term prohibition.
Kalshi, which is currently valued at $22 billion following a recent $1 billion funding round, did not immediately respond to a request for comment. The company has been actively working to prevent Nevada from restricting its platform and is also appealing a potentially similar temporary ban in Massachusetts. Nevada’s action marks the beginning of what could be a broader wave of state-level restrictions on the platform.
Over the past year, multiple states have filed lawsuits against Kalshi and other prediction market operators, including Polymarket and Crypto.com‘s platform, arguing that these companies are offering unlicensed sports bets subject to state regulation. The prediction market companies have maintained that they offer sports-related event contracts, which they argue fall under federal jurisdiction and are regulated by the CFTC, not individual states.
The Trump administration’s CFTC has sided with the prediction market platforms, arguing that states should not have authority to regulate them. Earlier this week, Arizona‘s attorney general filed criminal charges against Kalshi, alleging the company operated an illegal gambling service and permitted unlicensed election wagering. CFTC Chair Mike Selig swiftly condemned the move, calling it a jurisdictional dispute and describing the criminal prosecution as entirely inappropriate. Selig stated that the CFTC is closely monitoring the situation and evaluating its options.
Originally reported by Decrypt.
