Appeals Court Denies Kalshi’s Bid to Block Nevada State Regulation

A federal appeals court has denied a legal challenge from prediction market company Kalshi, allowing Nevada state authorities to move forward with regulatory supervision of the platform.

The 9th U.S. Circuit Court of Appeals rejected Kalshi’s motion to stop Nevada from asserting jurisdiction over its operations, as first reported by Engadget. The appellate ruling marks the latest chapter in a broader legal conflict between prediction market operators and state oversight agencies.

The dispute in Nevada began in February when state gambling regulators and the Nevada Attorney General filed a lawsuit against Kalshi. State officials alleged that the company was providing services within Nevada while bypassing statutory requirements to hold a valid sports gambling license.

The regulatory pressure against Kalshi extends beyond Nevada, with several other states questioning the lawfulness of prediction markets within their borders. Connecticut’s attorney general recently accused Kalshi of conducting an illegal sports betting business and is actively pursuing a state-wide ban against the service. Additional legal proceedings involving Kalshi are currently underway in Arizona, New York, and Rhode Island.

State actions against the company have yielded mixed outcomes in federal court. In April, a separate federal court issued a ruling finding that New Jersey did not possess the legal jurisdiction needed to impose state-level regulations on Kalshi’s platform.

At the heart of these courtroom conflicts is an unresolved debate over regulatory authority. Lawmakers and courts have yet to definitively determine whether individual states or the U.S. Commodity Futures Trading Commission (CFTC) hold primary regulatory authority over prediction trading platforms.

The rapid expansion of the prediction market sector has generated significant regulatory confusion across multiple jurisdictions. In response to state-level interventions, the CFTC has initiated legal action against three states that sought to enforce local gambling rules against Kalshi and rival platform Polymarket.