Kalshi’s legal fortunes in the historic home of United States sports betting have taken a turn for the worse.
- A federal judge in Nevada dissolved Kalshi’s earlier injunction, siding with state regulators who claim the platform is running unlicensed sports betting.
- Judge Andrew Gordon rejected Kalshi’s argument that the CFTC has exclusive authority over its sports event contracts and said Kalshi’s interpretation of federal law cannot stand.
- The ruling sets up further litigation, with similar prediction market disputes continuing across the United States.
A decision issued Monday by Andrew Gordon, chief judge for the U.S. District Court for Nevada, granted a motion to dissolve a preliminary injunction against local gaming regulators that he granted to Kalshi in April.
The injunction had held back Nevada sports betting regulators, who had sent Kalshi a cease-and-desist letter alleging the prediction market operator was running an unlicensed sports betting business in the state.
At the time, Gordon had agreed with Kalshi that its regulator, the Commodity Futures Trading Commission (CFTC), had “exclusive jurisdiction” over the contracts listed on the exchange.
Those event contracts include sports-related ones, which prediction markets are using to offer de facto sports wagering in all 50 states.
On second thought ...
However, after denying an injunction for another prediction market operator, Crypto.com, in a similar case in October, Gordon was asked to revisit his take on Kalshi. And he did.
“Kalshi relies on a strained reading of the already convoluted Commodities Exchange Act (CEA) in an attempt to evade state regulation,” Gordon wrote in Monday’s decision. “Kalshi’s interpretation would require all sports betting across the country to come within the jurisdiction of the CFTC rather than the states and Indian tribes. That interpretation upsets decades of federalism regarding gaming regulation, is contrary to Congress’ intent behind the CEA, and cannot be sustained.”
Gordon’s decision to dissolve Kalshi’s preliminary injunction quickly led to further litigation, as the prediction market operator seeks to protect its legal standing to facilitate wagering across the U.S. on a variety of events, including sporting ones.
Kalshi filed for a stay of the dissolution order on Tuesday, claiming that it "faces a threat of imminent criminal enforcement by Nevada authorities."
The prediction market operator added that it intends to file a notice of appeal.
"Defendants have left little doubt that they would bring criminal charges against Kalshi absent a stay," Kalshi's legal filing said. "But even if Kalshi could avoid prosecution by taking expeditious steps to geofence, Kalshi would face severe irreparable harm from shuttering existing contracts for users in Nevada."
Similar lawsuits and regulatory actions are raging all over the U.S. at the moment, as prediction markets and state gambling regulators scrap over the legality of sports event contracts.
Note that this order recognizes that Kalshi has raised "serious legal questions." That is significant. In order to obtain a stay pending appeal, a party must show that there are "serious legal questions" + the equities support a stay. https://t.co/b4lgcf0aby pic.twitter.com/UHBgaNuLWh
— Andrew Kim (@akhoya87) November 25, 2025
Those contracts can be bought and sold by the users of federally regulated prediction markets, allowing them to make de facto bets on sporting events, politics, and economics, among other things.
However, it is mostly the election and sports-related contracts that have irked state gaming regulators, as they see gambling as their bailiwick, not the CFTC.
“Kalshi has established a market for sports betting,” Judge Gordon wrote. “Kalshi advertised that it is the ‘first app for legal sports betting in all 50 states.’ But Kalshi is not licensed to conduct gaming in Nevada or any other state.”
Kalshi is now seeking to pause Gordon's latest decision. Otherwise, the prediction market could have to shut down its contested offerings in the state, as Crypto.com did.
There may be some grounds (or “serious questions”) for Kalshi to obtain some relief in the interim.
“I dissolve the injunction because the (Nevada Gaming Control Board) has shown that Kalshi is not likely to succeed on the merits, although there are serious questions on the merits,” Gordon wrote. “The Board also has shown that the balance of hardships does not tip sharply in Kalshi’s favor. Rather, the balance of hardships tips in favor of the Board, and the public interest favors dissolving the injunction.”
