Last updated on March 8th, 2026 at 04:49 pm
Nevada regulators have escalated their legal fight with prediction market platform Kalshi after a federal appeals court cleared the way for state enforcement action over the company’s sports-related contracts.
The Nevada Gaming Control Board filed a civil suit in state court shortly after the US Court of Appeals for the Ninth Circuit denied Kalshi’s request to block enforcement measures. The regulator argues that the company is effectively offering unlicensed sports wagering within Nevada, violating state gaming laws.
As expected, Nevada has sued Kalshi in state court and filed motions for an immediate TRO and preliminary injunction to block Kalshi from offering event contracts in Nevada. Kalshi quickly removed it to federal court. Nevada will now seek a remand back to state court. pic.twitter.com/rBe786eQS4
— Daniel Wallach (@WALLACHLEGAL) February 18, 2026
Kalshi, however, maintains that its contracts fall under federal commodity regulations and should be overseen exclusively by the Commodity Futures Trading Commission rather than state gaming authorities. The company has moved to shift the case back to federal court, continuing a legal argument it has made since the dispute began in 2025.
Nevada says contracts resemble unlicensed sports betting
In its latest filing, Nevada’s regulator argued that Kalshi’s sports event contracts function like wagers, allowing users to speculate on sporting outcomes in a way that mirrors traditional betting markets. Because the company does not hold a Nevada gaming license, officials say it is operating outside the law.
The legal clash follows months of courtroom battles. Kalshi initially sued Nevada after receiving a cease-and-desist order, and a temporary federal ruling previously paused state enforcement while the case moved forward. The recent appeals court decision effectively removed that shield, allowing Nevada to proceed with its enforcement lawsuit.
The outcome could have implications beyond Nevada, as several other states are examining or challenging prediction market platforms offering similar products.
Federal regulators push back as prediction markets grow
The broader debate intensified after CFTC chair Mike Selig publicly defended federal oversight of event contracts, arguing they are commodity derivatives rather than gambling products. The agency recently backed Crypto.com in a comparable legal dispute with Nevada, reinforcing its position that states should not reclassify federally regulated contracts as illegal betting.
Interest in prediction markets has also spread into mainstream politics and media. Trump Media & Technology Group previously indicated plans to integrate prediction markets into its social platform Truth Social through partnerships in the sector.
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