A day after the Ninth Circuit Court of Appeals denied Kalshi a stay preventing Nevada from banning the prediction market operator, a state judge in northern Nevada issued a temporary restraining (TRO) order Friday morning. The order bans the company from offering wagers on sports, politics, and entertainment in Nevada.
The TRO remains in effect until April 3, pending a hearing for a preliminary injunction in state court in Carson City before Judge Jason Woodbury. Woodbury said in his ruling that the Gaming Control Board “has a reasonable likelihood of success on the merits.” He said the injuries to Nevada are “irreparable and non-compensable” and that the Board is unable to protect underage people from wagering and the integrity of competition, as is currently done by licensed sportsbooks.
It’s part of a year-long legal battle between the Gaming Control Board, Kalshi, and other prediction market operators.
“It is hereby ordered that the plaintiff’s … application for a temporary restraining order and motion for preliminary injunction filed March 12 is granted insofar it requests issuance of a temporary restraining order to prohibit Kalshi from offering or facilitating the offering of sports, elections, and entertainment-related event contracts in Nevada from allowing its market to accept wagers on those events from persons under the age of 21 in Nevada.”
Nevada gaming regulators filed the lawsuit in state court in February against Kalshi as part of its ongoing battle with prediction market companies that Nevada argues should be licensed and regulated by the state. Kalshi contends it derives its authority from the Commodity Futures Trading Commission, which has given its blessing to the operators that have proliferated in states across the country.
Nevada Gaming Control Board Chair Mike Dreitzer issued a statement today. It said that the Board has taken decisive action in recent months to halt the operations of prediction markets in the state. With the decision Friday, the Board has successfully restricted the operation of all unlicensed prediction markets that had been known to be operating in Nevada, Dreitzer said.
“Kalshi has repeatedly stated that its operations are legal in 50 states, which is clearly not true,” Dreitzer said. “Prediction markets, to the extent they facilitate unlicensed gambling, are illegal in Nevada, and we have a statutory duty to protect the public. We want people in the state to wager safely at a licensed book. Nevada’s public policy, as expressed by the Legislature, is that the gaming industry is vitally important to the economy of the state and the general welfare of the inhabitants and therefore must be licensed, controlled, and assisted to protect the public health, safety, morals, good order, and general welfare of the inhabitants of the state,” Dreitzer said.
Opponents argue Congress never intended the CFTC to allow sports wagering and gambling that have fallen under the jurisdiction of state regulation.
The U.S. Court of Appeals for the Ninth Circuit handed down the decision Thursday.
Florida-based gaming attorney Daniel Wallach said Kalshi could ask the U.S. Supreme Court for an administrative order allowing it to continue operating in Nevada.
“The ruling reinforces that the states have to take direct action in the state court system and avoid getting dragged into time-delaying federal court proceedings,” Wallach said. “This is now the third TRO that the Nevada Gaming Control Board has secured in three cases against Kalshi, Polymarket, and Coinbase. By contrast, sending cease-and-desist letters to Kalshi is a trigger point for Kalshi to file a federal court proceeding that aborts state enforcement. States are beginning to recalibrate their approach and use state court civil or criminal enforcement actions to go at Kalshi directly through state law. That’s where these cases belong.”
Nevada joins Massachusetts, which obtained a preliminary injunction against Kalshi, Wallach said.
“The states are drawing on the lesson of Massachusetts and sue first,” Wallach said.
Kalshi declined comment Friday. Previously, Kalshi spokeswoman Elisabeth Diana defended the operator in its ongoing case with Nevada.
“Prediction markets are also operating within the regulatory structure. They have consumer protections very similar to that of the stock market. And regarding economic impact, last time I checked, some states are seeing record-setting gaming revenues,” Diana said.