Published on: February 11, 2026, 08:49h.
Updated on: February 11, 2026, 08:49h.
- Nevada set to initiate civil enforcement action against Kalshi
- Ongoing appeal in Ninth Circuit concerning sports contracts
- The state claims Kalshi disrupts Nevada’s regulated gaming market
The top legal representatives of Nevada have informed the U.S. Court of Appeals for the Ninth Circuit of their intent to initiate a civil enforcement case in state court against the prediction-market operator Kalshi.
This development marks a significant escalation in a legal battle that could determine whether state gaming authorities can regulate federally overseen event-contract platforms.
In a correspondence sent to the Ninth Circuit Court of Appeals on Tuesday, Jessica Whalan, Nevada’s Chief Deputy Solicitor General, emphasized, “Kalshi’s own actions now force State Defendants to intervene to halt Kalshi’s unlawful practices.”
“If Nevada fails to enforce its laws against Kalshi, it would unjustly grant the company the stay it seeks, despite the district court ruling that Kalshi is unlikely to succeed in its claims and is inflicting irrevocable damage to Nevada, its gaming sector, and the public,” she further stated.
Kalshi’s Business Model at Risk
Last March, Nevada issued a cease-and-desist order to Kalshi, accusing the platform of violating state gambling laws and cautioning that civil or criminal penalties could follow. In retaliation, Kalshi instigated legal action against Nevada, securing a temporary injunction to prevent state measures.
However, that protective order was lifted last month when U.S. District Judge Andrew Gordon ruled that Kalshi did not sufficiently demonstrate its likelihood of prevailing in its argument that federal commodities regulations override Nevada’s gaming laws.
This judgment essentially undermines the fundamental assumption behind Kalshi’s business model and similar platforms: that federal oversight inherently protects them from state gambling regulations. Kalshi has subsequently lodged an appeal with the Ninth Circuit.
Surge in Operations
Nevada’s recent actions appear aimed at preventing Kalshi from receiving a stay while its appeal is in progress — a crucial aspect given that the state maintains there is no current order safeguarding it from enforcing its laws against the operator.
The letter indicates that Kalshi has continued to grow during the stay request period, with Nevada initially refraining from enforcement as the appeal was being considered.
In the meantime, Kalshi has ramped up trading activity and marketed its service as legal throughout the United States, prompting Nevada to assert the necessity of applying its gaming laws “evenhandedly,” as outlined in the correspondence.
The implications of this case extend beyond the borders of Nevada. Nationwide, there is a growing tension between state gaming regulators and event-contract platforms that assert they are shielded by federal law. Nevada’s latest move indicates a robust intention to challenge that assumption.