Kalshi Faces Nevada Restraining Order Amid Growing Prediction Market Legal Battle

The First Judicial District Court of Nevada issued a 14-day restraining order against prediction market platform Kalshi on Friday, prohibiting the company from accepting sports, entertainment, and election bets from Nevada residents while a broader legal dispute over jurisdiction unfolds.

The order stems from a 2025 complaint by the Nevada Gaming Control Board, which directed Kalshi to stop offering sports event contracts in the state. Kalshi had attempted to transfer the case to federal court, citing potential business harm, but a federal appeals court rejected that move on Thursday and returned the matter to Nevada jurisdiction. The state court sided with regulators, ruling that an unlicensed operator like Kalshi undermines the Gaming Control Board's ability to carry out its legal mandate. A follow-up hearing is scheduled for April 3.

Kalshi's legal troubles extend well beyond Nevada. Earlier this week, Arizona's attorney general filed criminal charges against the platform for allegedly operating an unlicensed gambling business and facilitating illegal election wagering — part of a growing wave of state-level enforcement actions targeting prediction market operators.

At the center of this regulatory conflict is a fundamental question: who has the authority to govern prediction markets — state gaming commissions or the federal government? U.S. Commodity Futures Trading Commission Chairman Mike Selig has been vocal in asserting federal supremacy, filing court briefs and making public appearances to argue that the CFTC holds proper jurisdiction over these markets, not individual states. He has also begun rolling out formal CFTC oversight policies for the sector.

Adding another layer to the evolving landscape, Major League Baseball stepped in this week, signing a memorandum of understanding with the CFTC on prediction market oversight while also announcing a partnership with rival platform Polymarket. The legal battle is expected to intensify as courts weigh federal authority against state regulatory power.