A temporary restraining order has been issued by a Nevada judge against Kalshi, a prediction market operator, prohibiting the company from conducting business in the state without proper licensing. This marks a significant development in an escalating legal confrontation between state authorities and the prediction market industry.

Judge Jason Woodbury of the Carson City District Court granted the order following a request from the Nevada Gaming Control Board, which stops Kalshi from providing event contracts related to sports, elections, and entertainment for residents of Nevada.

The judge concluded that these contracts might constitute unlicensed gambling as per state regulations. Kalshi was classified as operating a “sports pool” under Nevada gaming guidelines. A court hearing is set for April 3 to determine if a more permanent injunction should be enacted.

Kalshi has contended that its contracts are under the sole jurisdiction of the Commodity Futures Trading Commission, however, the court dismissed that argument, thereby affirming the Nevada regulators’ right to enforce state laws.

“Prediction markets, when they enable unlicensed gambling, are deemed illegal in Nevada, as it is our legal obligation to safeguard the public,” stated Mike Dreitzer.

This ruling arrives as Kalshi experiences increased legal scrutiny in multiple U.S. states. A Massachusetts court has previously issued an injunction against the company from offering sports-related event contracts, although that ruling is currently on hold due to an appeal. Arizona has also pressed criminal charges against the firm, becoming the first state to do so.

In a related situation, the U.S. Court of Appeals for the Ninth Circuit declined Kalshi’s urgent request to continue its operations in Nevada while its appeal is processed, transferring the matter back to state court. Kalshi had aimed to have the case heard in federal court, but that proposition was turned down.

Legal experts indicate that this conflict mirrors a broader national debate about whether prediction markets should be governed by federal commodities regulations or state gambling statutes, with many anticipating a potential ruling by the U.S. Supreme Court on the issue.

“Unless the Supreme Court intervenes urgently, a temporary restraining order issued by a Nevada state court against Kalshi seems probable,” mentioned Daniel Wallach on X.