The Nevada Gaming Control Board has filed a civil enforcement action against KalshiEX LLC, accusing the federally regulated prediction market of offering unlicensed wagering in the state.
Summary
- The Nevada Gaming Control Board has filed a civil enforcement action against Kalshi, alleging its sports-linked event contracts amount to unlicensed gambling under state law.
- Kalshi is seeking to move the case to federal court, arguing it operates under the exclusive jurisdiction of the U.S. Commodity Futures Trading Commission.
- The lawsuit adds to a growing national battle between state gaming regulators and federally regulated prediction markets, with multiple states taking similar action.
Nevada moves to block Kalshi’s event trading
In a complaint filed in Carson City District Court, regulators argue that Kalshi’s sports-linked “event contracts” amount to gambling under Nevada law. The state is seeking declaratory relief and an injunction to stop the company from operating in Nevada without a gaming license.
According to the complaint, making “event contracts” available to Nevada residents without approval from the Nevada Gaming Commission violates multiple provisions of the state’s gaming code.
“The Board continues to vigorously fulfill its obligation to safeguard Nevada residents and gaming patrons,” said NGCB Chairman Mike Dreitzer.
Kalshi quickly moved to shift the case to federal court, reiterating its long-standing position that it falls under the exclusive jurisdiction of the Commodity Futures Trading Commission and not state gaming regulators.
State law vs. Federal oversight
Kalshi maintains that its contracts are financial derivatives regulated by the U.S. CFTC, not traditional bets. The company operates as a CFTC-designated exchange and says federal law preempts state gaming rules.
Nevada disagrees. Regulators argue that contracts tied to sports outcomes mirror sportsbook wagers and fall squarely under state jurisdiction.
The Board says allowing unlicensed operators would undermine Nevada’s tightly controlled gaming framework.
Nevada also recently sued the crypto exchange Coinbase over prediction markets launched through a Kalshi partnership.
The lawsuits come amid a growing national legal battle over whether prediction markets such as Kalshi fall under state gambling laws or are exclusively governed by federal regulators. States including Maryland, New Jersey, Ohio and Tennessee have also challenged prediction markets, issuing cease-and-desist orders or filing lawsuits to block unlicensed sports event contracts.
Meanwhile, the CFTC has pushed back, defending its authority over event contracts. In earlier disputes, Kalshi secured temporary relief in court, though those wins have been limited and closely watched.
At issue is who controls the fast-growing prediction market sector — federal derivatives regulators or state gaming boards.
The outcome could reshape how Americans trade on elections, sports and economic events. It may also determine whether prediction markets operate nationwide under a single federal regime, or face a patchwork of state gambling laws.
