Kalshi Dealt Major Setback in Court Fight to Remain in Nevada
A federal appeals court rejected Kalshi’s bid for a stay on Nevada’s efforts to block the platform; national debate over industry’s regulation heats up
- A federal appeals court rejected Kalshi’s emergency bid to halt Nevada’s push to block its prediction-market contracts.
- The ruling allows Nevada to proceed against Kalshi, potentially forcing the company to leave the state, according to an attorney.
- The CFTC’s chairman had filed a “friend of the court” brief with the appeals court confirming it had exclusive jurisdiction over the commodities-derivatives market.
Kalshi suffered a blow in its battle to remain available in Nevada, as a federal appeals court rejected its request for a stay on the state’s efforts to block the prediction-market platform.
The case is being followed closely as a debate heats up over the proper way to regulate the nascent and fast-growing prediction markets industry. Battle lines have formed between officials at the federal and state level who say buying and selling event contracts on platforms like Kalshi, including on sports, is distinct from online betting and those who see them as one and the same.
Nevada, the country’s gambling capital, has emerged as a key battleground. The state is arguing that Kalshi must obtain gaming licenses to keep operating there. Kalshi had filed a motion to the U.S. Appeals Court in Las Vegas seeking an administrative stay on Nevada’s civil-enforcement case against the company.
Within hours of Tuesday’s ruling, the state Gaming Control Board filed its enforcement proceeding against Kalshi in Nevada state court. The case may ultimately force Kalshi to leave Nevada, says Daniel Wallach, a lawyer focused on gaming regulation. “This was a major setback for Kalshi,” Wallach said
A Kalshi spokeswoman declined to comment.
Kalshi and Polymarket, another leading prediction-markets platform, offer all manner of things to bet on, from the likely attendees at the State of the Union to the high temperature that will be reached in Miami on a given day. A large amount of betting is focused on professional and college sports—the outcome of contests and performance of players—which puts the platforms in competition for the same audience that uses betting sites like FanDuel and DraftKings.
Earlier on Tuesday, the Commodity Futures Trading Commission filed a “friend of the court” brief with the appeals court, arguing that it had exclusive jurisdiction over the commodities-derivatives market, which it stated included event contracts like those offered by Kalshi.
“Event contracts allow businesses and individuals to hedge event-driven risks, enable investors to manage portfolio exposure, and provide the public with information about the outcome of future events,” Mike Selig, the CFTC’s chairman, wrote in a statement. “These products are commodity derivatives and squarely within the CFTC’s regulatory remit.”
For those who sought to challenge the CFTC’s authority on event contracts, Selig wrote on X, “We’ll see you in court.”
Utah Gov. Spencer Cox responded to the chairman’s X feed.
“I don’t remember the CFTC having authority over the ‘derivative market’ of LeBron James rebounds,” Cox wrote on X in response to the chairman’s remarks. “These prediction markets you are breathlessly defending are gambling—pure and simple.”