Big win for Kalshi in court battle as judge blocks Nevada crackdown
New York-based prediction market platform Kalshi has been granted a temporary reprieve in its escalating battle with Nevada state regulators, allowing it to continue offering sports-based event contracts in the state—at least for now.
U.S. District Court Chief Judge Andrew P. Gordon issued a minute order on 8 April 2025, granting in part Kalshi’s motion for a temporary restraining order and preliminary injunction. The order prevents the Nevada Gaming Commission (NGC) from enforcing a cease-and-desist notice it had issued against Kalshi, which sought to halt the company’s sports prediction markets.
While a more detailed written ruling is expected soon, Judge Gordon’s move denies the NGC’s own request for an emergency injunction against Kalshi. The decision effectively permits Kalshi to maintain its operations in Nevada as legal proceedings continue.
“Today, the Federal Court in Nevada granted Kalshi’s preliminary injunction and blocked the State from trying to prevent Kalshi from offering prediction markets,” a Kalshi spokesperson told media. “We are grateful for the court’s careful attention to this matter and recognition of Kalshi’s status as a CFTC-regulated exchange. On to the next step.”
The NGC has yet to issue a public comment on the ruling.
Background: A clash of jurisdictions
Kalshi operates as a federally regulated Designated Contract Market (DCM) under the oversight of the Commodity Futures Trading Commission (CFTC). After a landmark court victory against the CFTC in 2023, Kalshi was permitted to list political event contracts—such as markets tied to U.S. elections—setting a precedent for the legitimacy of such prediction platforms under federal commodities law.
Since then, Kalshi has expanded into sports markets, launching contracts related to major sporting events like the Super Bowl and NCAA’s March Madness. The firm recently partnered with popular trading platform Robinhood to offer prediction markets during this year’s March Madness tournament.
But the move into sports has triggered a backlash from state regulators. Nevada, along with New Jersey, Illinois, Maryland, Ohio, and Montana, issued cease-and-desist orders against Kalshi, Robinhood, and Crypto.com, arguing that the platforms were offering what amounted to unlicensed sports betting.
Kalshi responded by filing lawsuits against Nevada and New Jersey in federal court, asserting that its federally regulated status as a CFTC-compliant exchange exempts it from state-level gambling laws.
What’s at stake?
The case speaks of a growing jurisdictional tug-of-war between federal and state regulators over who gets to define and control the rapidly evolving space of prediction markets.
Kalshi’s position is that it operates in a fundamentally different domain from traditional sportsbooks, offering financial instruments rather than gambling products. By contrast, state agencies argue that markets based on athletic outcomes fall squarely within the scope of regulated sports betting.
In an interview with TechCrunch last week, Kalshi co-founder and CEO Tarek Mansour said, “We are literally like a financial exchange, but the underlying trading is events. The CFTC is our regulator. If the CFTC tells us to stop, we will absolutely stop. If they don’t, then we won’t.”
The implications of the Nevada court’s decision are significant. While not a final ruling, the preliminary injunction allows Kalshi to continue its Nevada operations, setting a potentially powerful precedent for other states that have taken similar enforcement actions.
A final ruling—or a possible Supreme Court challenge—could shape the national regulatory framework for event-based contracts.
Kalshi’s expanding footprint
Kalshi has not only fought its legal battles but has also moved strategically to strengthen its profile and political influence.
In January, the company appointed Donald Trump Jr. as a strategic advisor, signalling a deeper foray into Washington politics. More recently, Kalshi brought on Sara Slane as its Head of Corporate Development. Slane, a former senior vice president of public affairs at the American Gaming Association, played a key role in the legalisation of sports betting after the U.S. Supreme Court’s 2018 decision to overturn the federal ban.
“Never in my career have I seen a company with the combination of characteristics that Kalshi has: bold vision, outlier founders, deep commitment to regulatory compliance, and astronomical growth,” Slane said in a recent LinkedIn post.
Her appointment is expected to further enhance Kalshi’s relationships with lawmakers, regulators, and professional sports leagues.
What’s next?
While the Nevada court ruling is a major step forward for Kalshi, the broader question of whether sports prediction markets can coexist with state gambling laws remains unsettled. The CFTC is expected to release guidance by the end of May that could clarify its stance on sports event contracts.
