Kalshi Ordered to Stop Contracts in Nevada Dispute

The legal battle between Nevada gaming regulators and New York-based prediction market KalshiEx LLC may soon reach the US Supreme Court.

Kalshi, a financial services company that operates a derivatives exchange and sells what it calls “event contracts,” was ordered to stop issuing contracts following a recent ruling from the Ninth Circuit Court of Appeals. 

Upholding the Integrity of a “Thriving Gaming Industry”

The court sided with the Nevada Gaming Control Board, reversing a lower court’s decision from November that had temporarily blocked enforcement.

“The board continues to vigorously fulfill its obligation to safeguard Nevada residents and gaming patrons and uphold the integrity of a thriving gaming industry,” said Gaming Control Board chairman Mike Dreitzer.

Nevada regulators argue that Kalshi’s prediction markets are effectively accepting sports bets without a proper license. The contracts, available through Kalshi’s website and mobile app, were heavily traded in the days leading up to the Super Bowl. 

Some analysts suggest that Kalshi may have drawn action away from traditional Nevada sportsbooks, which reported their lowest Super Bowl betting handle since 2016. Kalshi, however, has said it sold an estimated $1 billion in Super Bowl contracts.

Daniel Wallach, a Florida-based gaming attorney, told X that the Supreme Court could be the next stop in the dispute. 

The conflict began last March, when the Nevada Gaming Control Board issued a cease-and-desist order to Kalshi. The company responded by suing individual members of the board, as well as the Nevada Gaming Commission and the state attorney general’s office.

The case is part of a broader trend, as, since last year, 20 states with legalized gambling have taken action against Kalshi, Polymarket, and Crypto.com, the three largest providers of prediction contracts in the US.

CFTC Chairman: “We’ll See You in Court”

Kalshi has received some high-profile support. Michael Selig, chairman of the Commodity Futures Trading Commission, filed a “friend of the court” brief backing Kalshi. 

In a statement, he noted that prediction markets have operated for two decades and serve as a useful gauge of public opinion. “To those who seek to challenge our authority in this space, let me be clear,” Selig said. “We’ll see you in court.”Other industry voices have also taken sides.

The Nevada Resort Association is siding with the state to protect legal sportsbooks, while the prediction market industry has backing from President Donald Trump. His son, Donald Trump Jr., has invested in Polymarket through his venture capital firm and serves as a strategic adviser to Kalshi.