The US Court of Appeals for the Ninth Circuit has denied Kalshi’s emergency motion for an administrative stay in Nevada, giving the state a clear path to seek action against the prediction market operator.
Kalshi had sought to pause action while the appeal progressed, but the court declined. The decision strips away the federal pause and leaves Nevada regulators with a clear path to continue in state court.
Soon after the ruling, the Nevada Gaming Control Board (NGCB) moved in state court, filing a previously confirmed civil enforcement action and an application for a Temporary Restraining Order (TRO) in the District Court for Carson City.
The regulator is asking for a judicial declaration and an injunction. Its position is that Kalshi has been offering wagering activity without a Nevada licence, in breach of state law.
According to the Board, Kalshi operates a derivatives exchange and prediction market offering event contracts through its website and mobile application.
These contracts, including those tied to sporting events, are accessible to individuals located in Nevada.
Regulators assert that certain sports event contracts and other similar offerings constitute wagering under Nevada statutes. Under that framework, any entity providing such products must hold appropriate state gaming licences.
The NGCB has formally deemed Kalshi’s operations unlawful within Nevada and in breach of state gaming statutes. Barring any court intervention, Kalshi may soon have to geofence itself out of the state.
NGCB receives support for action
NGCB Chairman Mike Dreitzer said the agency is continuing what he described as its duty to protect Nevada residents and gaming patrons, while preserving the integrity of the state’s gaming sector.
He pointed to Nevada’s public policy, set out by the legislature, which treats gaming as integral to the state’s economy and general welfare and subjects it to strict licensing and regulatory oversight in the interest of public health, safety and order.
The Nevada Resort Association (NRA) also weighed in before the Ninth Circuit, opposing Kalshi’s request for an administrative stay.
As gaming law and sports betting attorney Daniel Wallach pointed out, it told the court that Kalshi’s offerings have expanded significantly and now include multi-event, multi-sport parlay-style bets.
The group also argued that such products lack value for hedging or limiting financial risk and resemble traditional sports wagering.
In its filing, the NRA contended that any harm claimed by Kalshi stems from its own decision to expand and advertise its products without first obtaining approval from regulators or the courts.
It argued that granting further relief would allow the company additional time to operate in violation of Nevada law and disadvantage licensed competitors.
Massachusetts throws Kalshi a lifeline
While developments in Nevada represent a setback, Kalshi recently secured some relief in Massachusetts.
Once again highlighting the disparity in how states approach prediction markets, the Massachusetts Appeals Court has granted Kalshi a stay of an injunction issued earlier this month by a lower court.
The underlying order, issued on 6 February by a judge in the Suffolk Superior Court, had required the company to stop offering contracts tied to games or individual player performances within 30 days.
The appellate decision means Kalshi is not required, for now, to comply with that order.
The lower court ruling did not mandate liquidation of previously purchased contracts, though it would have prevented traders from increasing their positions.