A federal appeals court has cleared Nevada state authorities to enforce a temporary restraining order (TRO) against Kalshi, blocking the platform’s sports-event contracts.
The Ninth Circuit on Thursday denied Kalshi’s emergency request to stay a lower court proceeding, allowing Nevada regulators to take action while the matter proceeds. Legal observers say the decision returns the case to state court and makes a TRO against Kalshi appear imminent.
US gaming lawyer Daniel Wallach said Kalshi likely would be unable to operate in Nevada for at least 14 days until a preliminary injunction hearing, noting: “Since a TRO is not appealable under Nevada law, Kalshi would be required to exit the state in the interim.”
Nevada’s Gaming Control Board issued a cease-and-desist in March, arguing Kalshi’s sports-event contracts constitute unlicensed sports betting under state law. Kalshi contends its event contracts fall under the exclusive federal jurisdiction of the Commodity Futures Trading Commission and that any state-imposed block would cause “imminent harm.”
Prediction markets such as Kalshi and Polymarket have seen rapid growth, with weekly trading volumes reportedly exceeding $2 billion, according to Dune Analytics. That growth has drawn increased scrutiny from lawmakers and regulators over concerns including insider trading and market manipulation.
State regulators in Connecticut, New York, New Jersey and other jurisdictions have also sought to take action against Kalshi and rival platforms. Kalshi, Crypto.com, Polymarket and Coinbase face legal battles in multiple states over the classification and regulation of prediction-market contracts.
In a March 13 motion, Kalshi warned that allowing Nevada to proceed with a TRO while federal litigation is pending risks conflicting rulings between state and federal courts. The company said courts could reach “exactly the opposite conclusion” on whether federal commodities law preempts state gambling laws, potentially creating “jurisdictional chaos.”
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