State Court Sides With Gaming Board
On Friday, March 29, a Nevada state judge extended a temporary ban on Kalshi’s sports event contracts, reinforcing the state’s position that these products amount to unlicensed gambling. Judge Jason Woodbury of the First Judicial District Court granted the Nevada Gaming Control Board’s (NGCB) request for a preliminary injunction, ensuring that Kalshi remains barred from offering sports-related prediction markets in the state until at least April 17. This decision follows a temporary restraining order issued on March 20 and extends it by two weeks to finalize the language of the injunction.
The NGCB has maintained that Kalshi’s contracts—allowing users to buy and sell positions on outcomes like baseball games—are fundamentally indistinguishable from traditional sports bets offered by state-licensed gaming platforms. Judge Woodbury echoed this view in his ruling, stating that purchasing a contract on a sporting event via Kalshi is “indistinguishable” from placing a wager at a Nevada sportsbook. Mike Dreitzer, chairman of the NGCB, publicly backed the ruling and reiterated the board’s commitment to enforcing local gaming laws, which require explicit licensing for all wagering activities.
The temporary restraining order, first granted on March 20, was extended for two additional weeks to allow time for finalizing the injunction's language.
Kalshi’s “Swaps” Argument Falls Flat
Kalshi has argued that its event contracts are not bets but rather financial derivatives—specifically “swaps”—that fall under federal oversight by the Commodity Futures Trading Commission (CFTC). The company contends that its platform facilitates trading on real-world events in the same way that financial exchanges allow speculation on commodity prices or interest rates. However, Judge Woodbury rejected this defense outright, concluding that under Nevada law, these products constitute unlicensed gambling regardless of their classification as swaps at the federal level.
This marks the first time a state has secured an active court-enforced ban against Kalshi.
On paper, CFTC oversight might appear sufficient for platforms like Kalshi to operate nationwide—but in practice, state-level gaming regulations can override federal interpretations when it comes to what counts as gambling within their borders. This legal friction is now playing out most visibly in Nevada, home to America’s largest regulated betting industry.
Injunction Extends Restraining Order Timeline
The preliminary injunction will keep Kalshi’s ban in effect through at least April 17 as lawyers finalize its wording. The original temporary restraining order was issued on March 20 and specifically targeted contracts tied to baseball games and other sporting events. The scope of Judge Woodbury’s order also includes entertainment and election-based markets—meaning Nevada residents cannot legally trade positions on outcomes like award shows or political races via Kalshi without proper licensing.
According to coindesk.com, this legal action comes as state regulators increasingly scrutinize event-based prediction markets. Last month, Utah lawmakers passed their own bill aimed at both Kalshi and Polymarket, defining proposition-style bets on in-game events as gambling under state law—a move that signals growing legislative momentum against such platforms beyond Nevada.
CFTC and Nevada Remain at Odds
The ongoing legal battle highlights a deepening divide between federal regulators and state authorities over how to classify event-based contracts. While the CFTC—currently led by Chairman Mike Selig—has sided with prediction market providers like Kalshi in federal appeals courts and even filed amicus briefs supporting their position earlier this year, states like Nevada remain adamant that such activity constitutes gambling requiring local licensure. This regulatory clash leaves companies operating across multiple states facing significant compliance uncertainty.
Market observers have noted that while some states are moving aggressively to close perceived loopholes exploited by prediction markets, others have yet to take concrete action—creating an uneven landscape for companies like Kalshi. It’s unclear whether other jurisdictions will follow Nevada and Utah’s lead or wait for further guidance from federal courts or agencies.
For now, Kalshi faces an uphill battle if it hopes to resume operations in Nevada without first securing a gaming license—a process that could take months or longer depending on regulatory hurdles.
What still needs confirmation
It remains unclear whether the preliminary injunction against Kalshi, set to be finalized after the temporary restraining order expires on April 17, will include any modifications to the current ban or continue to block all sports, entertainment, and election-related contracts for Nevada residents; if the finalized injunction maintains the full scope of the ban, Kalshi will remain unable to offer these contracts in Nevada immediately following April 17.