Appeals Court Rejects Kalshi’s Bid to Block Nevada Ban

A federal appeals court has cleared Nevada state authorities to enforce a temporary restraining order against Kalshi, blocking its sports-event contracts.

The Ninth Circuit Appeals Court on Thursday denied Kalshi’s emergency request to stay a lower court proceeding, meaning the case returns to federal court and allows Nevada regulators to take action.

Gaming lawyer Daniel Wallach said a temporary restraining order (TRO) against Kalshi now appears imminent, and added that it wouldn’t be able to operate in Nevada for at least 14 days until a preliminary injunction hearing is held:

“Since a TRO is not appealable under Nevada law, Kalshi would be required to exit the state in the interim.”

The Nevada Gaming Control Board sent Kalshi a cease-and-desist in March over its offering of sports-event contracts, arguing that they constitute unlicensed sports betting under Nevada law.

Kalshi has argued in court that its event contracts are under the sole federal jurisdiction of the Commodity Futures Trading Commission and any block on its event contracts would cause it “imminent harm.” 

Prediction markets such as Kalshi and Polymarket have recently surged, with weekly trading volumes now consistently exceeding $2 billion, according to Dune Analytics. They have also attracted increased scrutiny from lawmakers, who are concerned about insider trading and market manipulation.

Related: SEC interpretation on crypto laws ‘a beginning, not an end,‘ says Atkins 

State regulators in Connecticut, New York, New Jersey and other states have also sought to take action over sports event contracts, with Kalshi and rival prediction market platforms Crypto.com, Polymarket and Coinbase in legal battles with multiple states.

Kalshi foresees conflict between courts

In a motion on March 13, Kalshi argued that letting Nevada proceed with its temporary restraining order while federal litigation is still pending creates a serious risk of conflicting rulings.