Nevada Issues Cease & Desist Letter to Kalshi

Kalshi’s future in Nevada is uncertain after the state’s gambling regulator ordered the financial exchange startup to halt trading on sporting events and elections.

A cease and desist letter issued Tuesday, March 14, by the Nevada Gaming Control Board calls on Kalshi to cease all “unlawful activity” within the state by 5 p.m. on March 14.

“Every sports pool in Nevada must undergo an extensive investigation prior to licensing, must adhere to strict regulation once licensed, and must pay all applicable taxes and fees,” Kirk D. Hendrick, the board’s chairman, said in a statement. “Any unlawful attempts to circumvent Nevada’s right to regulate gaming activity within its borders will be met with the full force of criminal and civil penalties.”

The letter is the first action taken against Kalshi at the state level. Last year, it won a lengthy legal battle against the Commodity Futures Trading Commission.

Because prediction markets like Kalshi and Crypto.com operate differently from traditional online sportsbooks, they are not required to follow state-by-state gambling regulations or taxation laws. For this reason, their presence has long concerned operators. That was before Kalshi expanded its reach into the sports arena.

According to the letter, even licensed sports pools in Nevada are prohibited from taking wagers on elections. As such, it calls Kalshi’s actions a “direct violation of Nevada’s public policy.”

While Kalshi is not an exact replica of sports betting, it’s often viewed as an attractive alternative. Similar to the stock market, Kalshi allows users to buy and sell contracts for real-world events such as the U.S. presidential election and the Super Bowl.

Legislators are looking at potentially banning election betting. However, support from President Donald Trump and CFTC chairman Brian Quintenz, a Kalshi board member who was commissioner of the CFTC during Trump’s first term in the White House, has only strengthened Kalshi’s standing as it faces pressure.

Donald Trump Jr., recently named a strategic advisor of Kalshi, is another prominent political backer.

Kalshi CEO Tarek Mansour recently took to social media site X (formerly Twitter) to say he is disappointed by the letter but that “Kalshi will stay committed to our approach and keep paving the way for regulated prediction markets to thrive in the U.S.”

Mansour added: “After the election, we were convinced that the value of prediction markets was now obvious to everyone, and that the regulatory battle for legal prediction markets was over. … We were right, except for the everyone part.”

The American Gaming Association has also been outspoken about prediction markets, along with BetEx, GeoComply, several tribal groups, and more. Each sent letters last month to the CFTC, which plans to hold a roundtable discussion once all public comments are heard.

This comes as sports betting’s presence in the U.S. keeps growing. Thirty-eight states plus Washington, D.C., are now legally operative. Missouri will become the 39th eligible state this fall.