A federal appeals court on Thursday denied Kalshi’s emergency request to pause a lower-court proceeding, clearing the way for Nevada regulators to enforce a temporary restraining order (TRO) that would block Kalshi’s sports-event contracts. The Ninth Circuit’s decision lets Nevada proceed while the broader dispute moves forward, effectively returning the matter to state court and making a TRO appear imminent.
Legal observers say the ruling could force Kalshi to suspend operations in Nevada at least until a preliminary injunction hearing, which may be scheduled about two weeks out. US gaming attorney Daniel Wallach noted that because TROs are not appealable under Nevada law, Kalshi would likely have to exit the state during that interim period.
The dispute began after Nevada’s Gaming Control Board issued a cease-and-desist in March, asserting that Kalshi’s contracts on sports outcomes amount to unlicensed sports betting under state law. Kalshi maintains its contracts are governed by federal commodities law and fall under the Commodity Futures Trading Commission’s jurisdiction, arguing that a state-imposed block would cause imminent and irreparable harm.
Prediction markets such as Kalshi and Polymarket have expanded rapidly, with weekly trading volumes reportedly topping $2 billion according to Dune Analytics. That growth has attracted scrutiny from lawmakers and regulators over risks including insider trading and market manipulation. Regulators in Connecticut, New York, New Jersey and other states have also pursued enforcement or litigation against Kalshi and rival platforms.
Kalshi, Crypto.com, Polymarket and Coinbase face multiple legal challenges in several states over how prediction-market contracts should be classified and regulated. Kalshi warned in court filings that allowing Nevada to act while federal litigation is pending risks conflicting rulings and jurisdictional confusion, but the Ninth Circuit’s decision leaves the state process in place for now.