Kalshi will have to operate under Nevada gaming rules, a state judge has decreed, in what is seen as a big blow to the prediction market platform. The ruling reversed a previous injunction that allowed Kalshi’s exchange to offer contracts on major sporting events while its lawyers fought a cease and desist order by the state.
There are fears from some within Kalshi that a precedent has been set. The company faces federal lawsuits from nearly two dozen states and tribal gaming authorities, and a defeat here could prove problematic for the long-term ambitions of a company that has captured the imagination with its unique product.
Protecting the public interest cited as principal reason by judge
In his ruling, Judge Andrew Gordon reiterated his belief that it is the responsibility of the state to provide adequate protection of consumers, including vulnerable gamblers and those underage.
He also argued that by escaping oversight by states and Indian tribes, Kalshi is upsetting “decades of federalism regarding gaming regulation, is contrary to Congress’ intent behind the Commodity Exchange Act, and cannot be sustained.”
Gordon had originally granted the injunction in a hearing earlier in the year, which allowed Kalshi to continue operating in Nevada, before hinting at its cut off. He told representatives of Kalshi at a hearing earlier in the month: “It seems like your definition is so broad that pretty much anything can become a swap, anything can have a financial consequence. Nobody thought sports bets were commodities or excluded commodities or swaps until some brilliant people at Kalshi.”
Kalshi to appeal the decision
The company released a statement in response, saying: “We respectfully disagree with this decision. As other courts have recognised, Kalshi is a regulated, nationwide exchange for real-world events and it is subject to exclusive federal jurisdiction. It’s very different from what state-regulated sportsbooks and casinos offer their customers. We are evaluating the decision and anticipate making an appeal to the Ninth Circuit.”
Despite the setback, Kalshi did receive a significant victory in a Californian court earlier in the month, where a court ruled against the Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians and Picayune Rancheria of the Chukchansi Indians, three tribes who were motioning to prohibit Kalshi from operating on tribal lands in the Golden State.
In that case, the judgment stated: “The court does not take lightly plaintiffs’ concerns about the effects Kalshi’s activities might have on tribal sovereignty and the tribes’ finances. Indeed, by self-certifying the legality of its event contracts in a way that insulates its activities from judicial review, Kalshi may have found a way around prohibitions on interstate gambling that were created with the tribes’ best interest in mind. But, on record currently before the court, and in light of the Commodity Exchange Act’s self-certification process, plaintiffs have not met their burden of showing a likelihood of success on their Indian Gaming Regulatory Act (IGRA) claim.”
The Nevada and California cases, taken in isolation, perfectly illustrates the growing divide across the USA when it comes to the issue of tackling sports betting.
Kalshi a unique and innovative platform
The American financial exchange and prediction platform burst onto marketing channels in a blaze of glory back in 2021.
From offering markets on the most searched person on Google in the calendar year to the top Netflix show of the week, Kalshi makes it possible for its patrons to trade on almost anything. Users buy and sell contracts, most of which are priced between 1 cent and $1, based on how likely people think an outcome is. Once said outcome has occurred, the money is paid out to whoever is right.
It has attracted more than two million users to its services in the last year, according to a report by News Nation, more than ten times the amount it had over a 12 months ago. A recent Bloomberg article reported that after a major funding round, proposals from VCs would value the company at up to $12 billion.
“Investors have been eager to back the fast-growing startup, and have discussed funding the company at valuations ranging from $10 billion to $12 billion or higher,” Bloomberg reported, ahead of the court findings.
Recent big winners on the platform include one customer who made $50,000 on predicting the next pope, while another made $23,000 for forecasting Astronomer CEO would have to resign after a salacious viral moment at a Coldplay concert.
The sticking point for Kalshi lies in its sports betting prediction services, though. After that setback in Nevada, a clear future just got a little murkier for Kalshi.
References
- iGaming Business: https://igamingbusiness.com/gaming/gordon-prediction-markets-kalshi-nevada-decision-overturned/
- Reuters: https://www.reuters.com/legal/government/kalshi-is-subject-nevada-gaming-rules-judge-finds-2025-11-26/
- Bloomberg : https://www.bloomberg.com/news/articles/2025-10-22/prediction-market-kalshi-fields-investor-offers-at-over-10-billion-valuation?srnd=phx-crypto&embedded-checkout=true
- Newsnation: https://www.newsnationnow.com/business/your-money/kalshi-prediction-markets/
