A federal appeals court has allowed Nevada regulators to move forward with a temporary restraining order against prediction market platform Kalshi, following a denial of the company’s request to stay the proceedings. The Ninth Circuit Court of Appeals rejected Kalshi’s motion for an administrative stay, clearing the way for the case to return to a state court. The decision could lead to Kalshi being barred from offering its contracts in Nevada for at least two weeks while a hearing on a preliminary injunction is scheduled.
Kalshi has faced regulatory pushback since March 2025, when the Nevada Gaming Control Board issued a cease-and-desist order related to sports-related prediction contracts. The company argued that a temporary restraining order should block enforcement across all contracts, warning that state and federal courts could issue conflicting rulings over jurisdiction. In its filings, Kalshi emphasized the risk of litigating the same issues across multiple venues, including Nevada state and federal courts, as well as separate appeals cases.
The platform highlighted concerns that inconsistent court decisions could undermine its rights, particularly regarding whether state regulators have authority over its products. Legal experts note that a temporary restraining order could effectively remove Kalshi from Nevada, pending further hearings. The move is part of broader regulatory scrutiny, with over a dozen states challenging the operations of prediction market providers. These actions focus mainly on sports-related contracts, asserting that state law applies despite federal oversight.
The Commodity Futures Trading Commission has maintained that it holds exclusive jurisdiction over prediction markets and has intervened in related cases through amicus briefs. It also recently signed a memorandum of understanding with Major League Baseball, coinciding with MLB’s partnership announcement with Polymarket, to clarify federal oversight in the space. Legal observers say the outcome of Nevada’s action could influence how state and federal authority over digital prediction markets is interpreted nationwide.
Kalshi’s legal challenges reflect broader tensions between innovation in financial and digital markets and existing regulatory frameworks. The case underscores ongoing debates over the jurisdiction of state regulators versus federal oversight bodies, especially in emerging sectors such as crypto-based and online prediction markets. Market participants are watching closely, as the court’s decisions may set precedent affecting other platforms facing similar regulatory challenges.
