Published on: February 18, 2026, 10:33h.
Updated on: February 18, 2026, 10:33h.
- 9th Circuit Court’s decision enables Nevada to prohibit Kalshi from operating in the state
- The Gaming Control Board initiated a civil enforcement action against the prediction market platform
- Board indicates Kalshi is growing its operations amidst ongoing legal disputes
In light of a ruling from the 9th Circuit Court of Appeals, Nevada’s Gaming Control Board (NGCB) has initiated a civil enforcement action aimed at stopping Kalshi, a prediction market operator, from conducting business within state borders.
The appeals court’s ruling follows the lifting of an injunction by U.S. District Judge Andrew Gordon that had permitted Kalshi’s operations in Nevada. The state argued that following the filing of a stay motion by Kalshi, the company has broadened its business model to include sports event contracts.
“Since submitting its stay motion, Kalshi has significantly ramped up its operations, rather than maintaining stability,” stated Deputy Solicitor General Jessica Whalen in a letter addressed to the 9th Circuit Court. “Kalshi’s trading volumes have surged, and it has aggressively (and misleadingly) promoted its sports bets as ‘100% legal’ in ‘all 50 states.’ As the district court noted, each day that Kalshi continues to operate unlawfully in Nevada inflicts ‘substantial irreparable harm to [State Defendants], the State of Nevada, the local gaming sector, and public interest.’”
Nevada has been proactive in its legal fight against prediction markets, with Whalen noting that, as per state knowledge, Kalshi is currently the only prediction market operating within Nevada.
Sports Event Contracts: The Core of the Kalshi/Nevada Dispute
Kalshi’s contracts related to sports events, which contribute significantly to the exchange’s activity, are central to the ongoing legal dispute with Nevada.
Essentially, Nevada and several other states argue that prediction market companies cannot offer financial products equating to sports betting within their jurisdictions, as these operators lack the required state gaming licenses. In contrast, the prediction market operators argue for federal preemption, which supports the notion that federal laws supersede state regulations.
Although prediction market companies fall under federal regulation by the Commodities Futures Trading Commission (CFTC), courts have consistently ruled in favor of states, concluding that entities like Kalshi are providing gambling services without obtaining necessary state licenses.
“Kalshi functions as a financial services entity that manages a derivatives exchange and prediction market, offering products termed event contracts for purchase,” stated the NGCB in its civil enforcement suit. “These products are available for sale through Kalshi’s website and mobile application, and are accessible to users in Nevada. The Board perceives the offering of sports event contracts, alongside certain other event contracts, as wagering activities under NRS 463.0193 and 463.01962. Therefore, businesses providing such contracts are required to be licensed.”
Controversy Around Prediction Markets Divided by Political Lines
The NGCB’s action against Kalshi takes place amid a growing political discourse surrounding prediction markets. Support for companies such as Kalshi and Polymarket has been expressed by the Trump Administration, while Senate Democrats have taken a contrary stance against these emerging enterprises.
Speculation exists that the White House’s support for the industry is influenced by Donald Trump Jr.’s involvement as an advisor to both Kalshi and Polymarket. His venture capital firm, 1789 Capital, is also a known financial supporter of Polymarket. Nonetheless, yes/no exchange platforms are striving to appeal to a wide range of political perspectives.
For instance, Kalshi has recently appointed a former aide from President Biden’s administration to spearhead its federal lobbying initiatives, emphasizing its intent to broaden its political outreach. Additionally, the law firm representing Kalshi is a notable benefactor of Democratic candidates and electoral committees.