Nevada to File Civil Enforcement Action Against Kalshi in State Court
Nevada plans a new civil enforcement action against Kalshi, escalating its fight to block sports prediction markets in the state.
Nevada has informed the Ninth Circuit Court of Appeals that it intends to file a civil enforcement action in state court against Kalshi, marking a sharp escalation in the state’s campaign to block sports-related prediction markets.
According to filings referenced in appellate proceedings, the Nevada Attorney General’s Office plans to pursue direct enforcement under Nevada gaming law as early as next week. State regulators classify Kalshi’s sports event contracts as unlicensed gambling activity.
The move represents a new phase in the ongoing legal conflict between Nevada regulators and federally regulated prediction platforms.
Why Nevada Is Escalating Now
In court filings, Nevada argued that Kalshi’s operations have expanded significantly in recent weeks, citing:
- “Massively increased” trading volumes
- Aggressive marketing campaigns
- Prominent Las Vegas billboards during Super Bowl week
State officials contend that allowing Kalshi to continue operating while federal appeals are pending would effectively grant the company a “de facto” stay it did not obtain through the courts.
Rather than waiting for appellate resolution, Nevada is now moving to enforce its own gaming statutes directly in state court.
Federal Appeal vs. State Enforcement
Kalshi is currently appealing a federal district court ruling that dissolved a prior legal shield protecting its sports contracts. That federal litigation centers on whether the Commodity Futures Trading Commission has the authority to approve sports event contracts under federal commodities law.
Nevada, however, argues that regardless of federal oversight:
- Sports outcome contracts constitute wagering under Nevada law
- Only licensed sportsbooks may offer such products
- State regulators retain independent enforcement authority
By shifting to state court, Nevada is attempting to separate its enforcement powers from the ongoing federal appellate process.
A Pattern of State-Level Crackdowns
Nevada’s move follows similar regulatory action in other jurisdictions:
- In Massachusetts, a judge recently granted a preliminary injunction blocking Kalshi from offering sports contracts in the state.
- Nevada regulators also secured a temporary restraining order against Coinbase, which launched event contracts through a partnership with Kalshi.
These actions reflect a coordinated push by state gaming regulators to assert authority over sports-based prediction markets.
The Industry Stakes
Analysts have described the conflict as a regulatory “guerrilla war” between state gaming commissions and federally regulated prediction exchanges.
At stake is the structure of the prediction market industry itself:
If states prevail:
- Platforms may be required to obtain state gaming licenses
- National liquidity pools could fragment
- Operations may mirror the state-by-state model used by sportsbooks
If federal authority prevails:
- Prediction markets could continue operating nationally
- State gaming regulators’ power over sports contracts could narrow
- Competitive pressure on traditional sportsbooks could increase
For companies like Kalshi, the outcome could determine whether sports event contracts remain viable nationwide.
Nevada’s Broader Enforcement Strategy
Nevada has historically taken an aggressive stance toward unlicensed gambling operators.
The state’s argument hinges on protecting:
- Consumer safeguards
- Tax revenue structures
- The integrity of licensed gaming
Officials contend that failure to act would undermine Nevada’s regulatory framework and allow unlicensed competitors to operate freely during prolonged federal litigation.
What Happens Next
The anticipated civil enforcement filing in Nevada state court will likely seek:
- An injunction to block sports contracts
- Monetary penalties
- Additional compliance remedies
Kalshi is expected to contest the action, potentially arguing federal preemption and constitutional protections.
Further litigation could proceed simultaneously in state and federal courts, raising the possibility of conflicting rulings.
Why This Matters
Nevada’s decision to initiate a fresh civil action underscores the growing divide between state gaming regulators and federally supervised prediction exchanges.
The legal battle now centers on a fundamental question:
Are sports prediction contracts financial derivatives regulated nationally — or gambling products governed by state law?
The answer could reshape the future of sports event trading across the United States.
Bottom Line
Nevada’s planned civil enforcement action against Kalshi signals a decisive escalation in the state’s effort to shut down sports-related prediction markets.
As the dispute moves from appellate courts to state enforcement proceedings, the outcome may define how prediction markets coexist — or collide — with America’s established sports betting framework.
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