Chavdar Vasilev is a journalist covering the casino and sports betting market sectors for CasinoBeats. He joined CasinoBeats in May 2025 and reports on industry-shaping stories across the US and beyond, including legislative debates, market...
Read Full BioNevada’s legal fight with prediction markets took a sharp turn after Chief Judge Andrew P. Gordon dissolved the preliminary injunction that had shielded Kalshi since April. The 29-page ruling concludes that Kalshi’s sports-related event contracts fall outside the Commodity Futures Trading Commission’s (CFTC) exclusive jurisdiction. Also, Nevada may enforce its gambling laws.
Judge Gordon criticized Kalshi’s legal theory bluntly. He wrote that, “Kalshi relies on a strained reading of the already convoluted Commodities Exchange Act (CEA) in an attempt to evade state regulation.”
The decision reverses the court’s own April ruling, a win that helped propel Kalshi’s expansion. However, an October ruling against Crypto.com, which concluded that sports event contracts do not fall under “swaps,” weakened Kalshi’s position considerably.
The judge adopts that reasoning in full: “Event contracts that turn on the outcomes of sporting events are not swaps and thus do not fall within the CFTC’s exclusive jurisdiction.”
He added that Kalshi’s reading “would require all sports betting across the country to come within the jurisdiction of the CFTC … and cannot be sustained.”
A Rapidly Shifting Legal Landscape
The court emphasized that circumstances had changed significantly since April. Part of that shift is due to Kalshi’s expansion into prop-style sports markets.
The judge said: “Kalshi has issued a range of new contracts … such as prop bets on things like whether a team will score a touchdown … or the point total over/under on a game.”
The judge described the issue as “a novel and evolving area of the law.” He added that “The law and facts have evolved in this court and others.” Furthermore, Gordon notes that rulings by other courts could lead to further changes in the law.
Nevada’s Interests Outweigh Kalshi’s
Judge Gordon concluded that Nevada’s interests in regulating gaming exceed any harm to Kalshi. He noted: “Kalshi’s harms are largely monetary,” which “can be mitigated through geofencing.”
By contrast, “Balanced against Kalshi’s harms are substantial, irreparable harms to the Board, the State of Nevada, the gaming industry in this state, and the public interest.”
“The gaming industry is vitally important to the economy of the State and the general welfare of the inhabitants,” he added.
And Nevada has a clear interest in ensuring “the same rigorous regulations and oversight” apply. That includes ensuring individuals under 21 do not have access to gaming.
The ruling also notes that if the court adopts Kalshi’s view, there’s a “not-insignificant” chance that regulated sportsbooks will move to become DCMs. That would result in even more unregulated gambling and devastate the Nevada economy.
Gordon noted that FanDuel and DraftKings have already done so: “FanDuel and DraftKings … agreed … to not seek licensing in Nevada in order to focus efforts on launching prediction markets in other states.”
What’s Next: Emergency Stay, Ninth Circuit Appeal & New Nevada Board Warning
Kalshi’s Emergency Stay Request
Kalshi immediately filed an emergency motion to stay the ruling, warning it could face enforcement instantly after the injunction dissolves. The motion seeks permission to continue operating in Nevada while appealing to the U.S. Court of Appeals for the Ninth Circuit.
Odds of a Stay: Long
Although Judge Gordon acknowledged “serious legal questions,” he already held that the balance of harms does not “tip sharply” toward Kalshi — a requirement under the Ninth Circuit stay doctrine. Gaming attorney Daniel Wallach notes this makes the stay an uphill battle.
Ninth Circuit Could Act Quickly
Wallach expects a Ninth Circuit emergency-motion timeline “as early as next week.” That means Kalshi’s stay request could reach appellate judges within days.
A stay ruling would be the first appellate-level signal on sports-event contracts. That’s crucial given four straight district-court losses for event-contract operators.
Supreme Court Shadow-Docket Possibility
If both the district court and Ninth Circuit deny a stay, Kalshi could petition the U.S. Supreme Court for an emergency stay. Such requests are initially directed to Justice Elena Kagan. While rare, the Supreme Court has granted stays in past gaming-compact cases.
Nevada Gaming Control Board Issues New Notice
Following the ruling, the Nevada Gaming Control Board issued a notice. It reiterated its previous letter that sports event contracts are considered gambling under state law: “The Board considers offering sports event contracts, or certain other events contracts, to constitute a wagering activity under NRS 463.0193 and 463.01962.”
It emphasized: “Offerings for Sports and Other Events Contracts may be conducted in Nevada only if the offering entity possesses a nonrestricted gaming license with sports pool approval in Nevada.”
And warned all licensees: “Engaging in unlawful sports wagering in another state or entering into a business relationship with another entity offering unlawful sports wagering in another state may call into question the good character and integrity of the licensee.”
The notice signals heightened scrutiny as more states consider litigation.
The Bigger Picture
Despite Kalshi’s setback, analysts caution that appeals courts have not yet weighed in on the matter. As Wallach put it, the litigation is “only in the fourth inning.”
The upcoming stay ruling will determine whether Kalshi continues to operate in Nevada or must immediately geofence residents while litigation unfolds.
A Ninth Circuit order could arrive within days. That could shape the treatment of prediction markets nationwide.
