A Nevada Court has banned Kalshi’s sports, entertainment, and politics contracts for 14 days, seemingly requiring the prediction market to shut off access to these products in a state for the first time.
The First Judicial District Court of Carson City, a state court in Nevada, handed down a temporary restraining order (TRO) Friday, following a request from the Nevada Gaming Control Board (NGCB).
The order was an ex parte TRO, meaning that it was issued based solely on the NGCB’s request, rather than Kalshi having the opportunity to argue it should not have been granted.
It does not appear that this order can be paused, stayed, or otherwise prevented from going into force, even if the prediction market appeals it. Unless Kalshi finds an unexpected new way to fight enforcement, it may have to block sports contracts in a single state for the first time.
While other states have tried to enforce their gambling laws against Kalshi, this could be the first time that Kalshi will actually shut down its sports offering in any state, if it does so.
The order will be in place until a hearing is held on whether to issue an injunction that would also ban Kalshi’s sports, entertainment, and politics contracts. That hearing will be on April 3.
Kalshi may be able to take the issue to the Supreme Court’s emergency docket, but the TRO would remain in force at least temporarily while it does so.
Polymarket received a similar order last month, and blocked sports contracts in Nevada.
The order was first reported by lawyer Daniel Wallach on social media site X.
A Kalshi spokesperson declined to comment when approached by InGame.
Federal courts denied stay requests
The order was made possible after a series of federal court decisions denying Kalshi protection against state-level enforcement.
First, the U.S. District Court for the District of Nevada dissolved an injunction that had prevented the state from taking action against the business.
Then, the U.S. Court of Appeals for the Ninth Circuit denied Kalshi an administrative stay while it appealed the injunction decision. This opened the door for Nevada to file its lawsuit in state court.
Kalshi then tried to move that case to federal court, but its effort was rejected. It tried to appeal that decision, and requested a stay while the appeal was heard, but the Ninth Circuit denied that stay too, leaving the business with no protection against state-level enforcement.
Kalshi also faces state-level civil enforcement in Massachusetts, where a court issued an injunction banning the prediction market from the state, but it’s not in force while the business appeals. It also faces criminal charges in Arizona.
Kalshi is suing a number of other states in an attempt to block them from enforcing state gambling laws.
In all states, including Nevada, Kalshi argues that it is not subject to state gambling laws because it is a federally regulated exchange, under the “exclusive jurisdiction” of the Commodity Futures Trading Commission. States argue that the CFTC’s jurisdiction does not extend int gambling laws, and that the commodity trading statute that Kalshi says supersedes state law does not cover contracts on sports.
Will Kalshi geofence Nevada?
Kalshi has previously argued that geoblocking certain states would be expensive and time consuming. For countries on Kalshi’s banned list, the prediction market does not use geolocation services but instead uses a user’s residency information, which is provided upon sign-up. This means that users can still trade on Kalshi from banned countries, provided that they are residents of countries where Kalshi is legal. It is not clear whether any potential Nevada block will work the same way, allowing non-residents who visit the state to continue to trade.
Crypto.com, which blocked sports contracts in Nevada after a court denied it an injunction, uses residency information rather than geofencing to block Nevada.
Kalshi has argued that blocking a single state violates CFTC rules about “impartial access,” but other prediction markets that have limited their sports offerings to certain states have not faced disciplinary action. It has also argued that geofencing is prohibitively expensive.
