The U.S. District Court for Nevada has issued a temporary restraining order for 14 days, effective immediately, prohibiting Kalshi from 'offering a derivatives exchange and prediction market that provides contracts based on events related to sports, elections, and entertainment' without first obtaining gaming licenses.
This may be the first time Kalshi has been forced to cease its activities within a U.S. state. Massachusetts previously issued a similar temporary restraining order; however, Kalshi continued operations there while appealing the ruling. The company declined to comment.
The legal confrontation dates back over a year when Nevada regulators issued Kalshi a cease-and-desist notice demanding it stop offering sports-related contracts. Since then, the dispute has developed into a complex legal battle between plaintiffs and defendants, shifting between state and federal courts, which the company has described as a 'judicial swamp for authorities.'
After the 14-day period, the court will consider whether to extend the ban for the duration of the case. Gaming law attorney Daniel Wallach states, 'The expectation is that the judge will convert today’s order into a preliminary injunction that lasts throughout the case.'
This legal move comes after a tumultuous few weeks for the company; the Arizona Attorney General has filed criminal charges against Kalshi for operating an illegal gambling operation, while the company recently filed a preemptive lawsuit against state regulators challenging any attempts to subject it to local gambling laws. Similar legal battles are underway in several states, including Ohio, Tennessee, and Massachusetts.
Several prominent prediction market platforms, including Kalshi, offer event-related contracts to individuals over 18 across the U.S., even in states that legally prohibit sports betting. As a result, a 19-year-old in Utah can place money on the outcome of a football game through prediction markets, even though official sports betting is not allowed in the state. A similar example holds for a young person in Indiana, despite state laws prohibiting bets from those under 21, inciting anger among a growing number of bipartisan lawmakers.
Kalshi insists that its event-related contracts—where one can, for example, bet on the winning team in the Super Bowl or a specific game in the NCAA basketball 'March Madness' tournament—are not a form of betting but should be regarded as financial instruments known as 'swaps.' So far, the federal government agrees with this view; the Commodity Futures Trading Commission (CFTC) claims it holds exclusive jurisdiction over swap markets and other derivatives markets. CFTC Chair Michael Selig has rejected calls to subject the sector to state gambling laws, stating he will meet critics 'in court.'
This federal view has not deterred the efforts of state prosecutors and regulatory bodies, which have recently achieved notable victories. In January, Nevada issued a temporary restraining order preventing the operation of the Polymarket platform within the state until April; although Polymarket has limited U.S. operations, most of its trading volume occurs on its global exchange, which is technically blocked in the U.S. but accessible to those using virtual private networks (VPNs) to bypass the ban.
Last week, a court in Ohio denied Kalshi's request for a preliminary injunction preventing state regulators from suing it for violating gambling laws, with U.S. District Judge Sarah D. Morrison stating that the court has a duty to 'avoid absurdity' in its decision to deny the request. Conversely, Kalshi scored a significant victory earlier in Tennessee when a federal judge barred state regulators from prosecuting it.
The matter may ultimately require a final decision from the Supreme Court, but in the near term, Kalshi will be forced to halt its operations in Nevada, one of the largest gambling markets in the country. However, it’s not all bad news: Bloomberg reported before the ruling that Kalshi recently raised an additional $1 billion from investors at a valuation of $22 billion, indicating it has doubled its valuation since the end of 2025.
Update: 3/20/2026, 12:50 PM Pacific — The story has been updated to include additional context regarding the state lawsuits against Kalshi.