An appeals court has denied Kalshi a stay that would have prevented Nevada from banning its sports contracts, meaning the prediction market may have to bring the case to the Supreme Court’s emergency docket, or face a court order to shut down its sports contracts in the state.
The U.S. Court of Appeals for the Ninth Circuit handed down the decision Thursday.
This means that Kalshi has no federal shield against potential enforcement from a Nevada state-level court, the First Judicial Court of Carson City, where it already faces a lawsuit, filed by the Nevada Gaming Control Board (NGCB) last month.
Kalshi had argued that the lawsuit should be heard in federal court, but the U.S. District Court for the District of Nevada rejected its arguments and sent the case back to the state court. Kalshi then appealed that decision to the U.S. Court of Appeals for the Ninth Circuit, and requested a stay of enforcement while the appeal was being considered.
That stay has now been denied by the Ninth Circuit.
bbe4385b-62ff-49be-a3ad-6a9888939e85Will Kalshi go to SCOTUS next?
Last month, the NGCB sued Kalshi in the First Judicial Court of Carson City requesting a temporary restraining order that could ban the prediction market from the state for 14 days. That order can be granted without requiring a response from Kalshi, and a similar order was already handed to Polymarket. Therefore, it appears likely that if Kalshi cannot get another court to halt enforcement, the state court will issue an order banning its sports contracts.
Kalshi’s remaining path may be the Supreme Court’s emergency docket.
Kalshi could appeal to a single Supreme Court justice – in this case Elena Kagan, as the case is in the Ninth Circuit – who may then either act alone or refer the matter to the full Supreme Court. If Kalshi petitioned for a stay of enforcement, the NGCB would get a chance to respond, Kalshi could then reply to the response, and then the court would issue a brief order granting or denying the stay.
NGCB said Kalshi had no grounds to appeal
The court did not give a reason for denying the stay, but in the state’s arguments against staying enforcement, it argued that Kalshi had no grounds to appeal.
Usually, the decision to send a case back to state court cannot be appealed, but there is an exception for parties that argue the case must be heard in federal court because they are being sued over actions they took while acting as a federal officer.
Kalshi’s argument referenced the federal officer statute at times, but it did not directly argue that the company was acting as a federal officer. Instead it said that the NGCB should have sued the Commodity Futures Trading Commission (CFTC), which itself is a federal officer. The NGCB’s brief arguing against the stay says that, “Kalshi sought to amend its notice of removal, apparently because it recognized that it had not removed the case on any appealable ground. Kalshi attempted to “clarif[y]” that it had “properly ‘invoked’ [the federal officer statute]” as a basis for removal.”
In contrast, Polymarket – which also seeks to have its case against the NGCB moved to federal court, and is also appealing the decision to send the case back to state court – more clearly relied on the federal officer argument. The court has not yet decided on whether Polymarket should receive a stay.
Kalshi-NV legal fight nearly a year old
The NGCB’s lawsuit was made possible after the Ninth Circuit rejected a previous administrative stay request from Kalshi, opening the door to a state lawsuit.
Kalshi sued the state in March 2025, in an attempt to win an injunction that would prevent it from enforcing its gambling laws against the business.
It initially won an injunction, but the judge later dissolved it, after ruling that sports contracts are not covered by the federal Commodity Exchange Act. Kalshi is appealing that decision in the Ninth Circuit, but the court has not prevented the state from taking action while the appeal is ongoing.
Kalshi continues to offer its sports contracts in all 50 states, despite authorities in many states arguing that they are illegal. The prediction market has argued that blocking a single state violates CFTC rules about “impartial access,” though 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.
