Nevada Sues Kalshi in Escalating Battle over Sports Event Contracts

Kalshi’s efforts to establish itself as a nationwide sports event contract operator have hit a wall in Nevada, where state regulators have launched a fresh legal challenge to restrict the platform. On Tuesday, the Nevada Gaming Control Board filed suit to block the New York-based company from offering contracts tied to professional and collegiate sports.

Kalshi Contends That Its Sports Offerings Are Not Wagering

Nevada officials argue that Kalshi’s sports contracts constitute wagering according to state law. They insist that the company must obtain a Nevada gaming license and comply with the state’s strict compliance requirements. According to regulators, Kalshi does not offer critical customer protection measures, such as age restrictions and safeguards against insider manipulation or match fixing.

The filing comes despite recent statements by the Commodity Futures Trading Commission (CFTC) that it has exclusive jurisdiction over prediction markets. Kalshi likewise asserts that its contracts function as swaps, placing them firmly under federal oversight rather than state gaming statutes. However, this stance remains heavily contested.

For months, Kalshi sought to keep Nevada regulators from bringing an enforcement case. However, a federal appeals court has now denied a request to suspend a lower court ruling that allowed state authorities to proceed with their actions against the company. Kalshi immediately filed a motion to transfer the dispute to federal court, arguing that the case hinges on federal preemption.

States Are Increasingly Wary of Prediction Markets

If Nevada succeeds in securing a temporary injunction, it would become the second state to win a court order against Kalshi’s sports offerings. Earlier this year, a Massachusetts judge sided with the state, temporarily blocking such contracts. The ruling has since been cited by authorities in multiple states as pushback against prediction markets continues to grow.

Nevada contends that it seeks to ensure consumer protection and regulatory equality. The state has already barred other platforms such as Coinbase and Polymarket, as officials fear that permitting federally regulated exchanges to operate alongside licensed sportsbooks would damage the integrity of a system built on strict local oversight.

Kalshi, meanwhile, asserts that Congress gives the CFTC exclusive control over all derivatives markets, including event contracts, even as its sports listings resemble traditional betting markets. Until courts resolve that divide, Kalshi’s expansion into sports will likely face mounting challenges from states, tribes, and other stakeholders in the regulated sports betting sector.