A federal appeals court has cleared Nevada regulators to pursue a temporary restraining order (TRO) against prediction market platform Kalshi.
Key points:
- The Ninth Circuit Appeals Court denied Kalshi’s emergency request to halt proceedings, sending the case back to federal court.
- If issued, the TRO would force Kalshi to stop operating in Nevada for at least 14 days, as such orders are not appealable under state law.
- The case began after Nevada regulators claimed Kalshi offered unlicensed sports betting, while Kalshi argues its contracts are under federal CFTC jurisdiction, creating a potential conflict.
Broader context:
- Other states, including Connecticut, New York, and New Jersey, have also challenged sports-event prediction contracts from Kalshi and competitors like Polymarket and Crypto.com.
- The CFTC plans to establish a federal rulebook for prediction markets, asserting exclusive oversight.
- Prediction markets have grown rapidly, with weekly trading volumes surpassing $2 billion, and ultra-short duration contracts (5–15 minute bets) becoming increasingly popular.
In short: Nevada regulators can now move forward, potentially forcing Kalshi to pause operations in the state, amid broader regulatory scrutiny of U.S. prediction markets.
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