Recently, Nevada gaming regulators filed a lawsuit seeking to block prediction market operator Kalshi from offering event contracts that would allow the American state’s residents to bet on sports, including football and basketball games.
This development adds a new chapter to the battle over state gaming regulators’ ability to police companies like Kalshi, which allow users to place financial bets through their prediction markets.
The battle is set to escalate in the coming years, as the lawsuit came the same day the Commodity Futures Trading Commission threw its support behind companies like Kalshi, arguing it has exclusive jurisdiction over prediction markets.
While Kalshi fought legally in recent months to prevent Nevada regulators from filing a case against the prediction market operator, a federal appeals court declined on February 17 to put on hold a judge’s November 2025 order dissolving an injunction that had previously prevented Nevada authorities from pursuing enforcement action.
If Nevada succeeds, it will become the second state to secure a court order blocking Kalshi from offering sports event contracts, following a Massachusetts judge’s injunction issued at the behest of the desert state’s attorney general on February 5. That injunction was set to take effect in 30 days, but a state appeals court justice put it on hold.
In its lawsuit, Nevada stated that offering sports event contracts, or certain other event contracts, constitutes wagering activity under Nevada state law, and due to this, Kalshi must be licensed. The authorities further accused the prediction market operator of not complying with state gaming regulations, including those prohibiting anyone under 21 from placing wagers and requiring entities accepting wagers on sports events to deploy safeguards against wagers by insiders, like players and match fixing.
The state has already convinced judges to issue orders barring two other prediction market operators, Coinbase and Polymarket, from offering event contracts. Nevada is seeking to have a state court judge issue a similar temporary restraining order against Kalshi, but the company, soon after Tuesday’s (February 17) case was filed, sought to transfer it to federal court, arguing the case raised a matter of law over whether it was subject to the CFTC’s exclusive jurisdiction.
On its part, Kalshi believes that only the federal regulator has sole jurisdiction over its event contracts as they are a form of swaps, a type of derivative contract.