TLDR
- Nevada issued a temporary restraining order forcing Kalshi to stop offering sports, election, and entertainment contracts in the state
- The Nevada Gaming Control Board says Kalshi is operating without a gaming license and its contracts count as illegal wagering
- Kalshi has complied with the order but says it disagrees and will fight the restrictions in court
- The TRO lasts at least 14 days with a hearing set for April 3 to decide what happens next
- Kalshi faces growing legal pressure from multiple states including Arizona criminal charges and a federal class-action lawsuit in Georgia
Kalshi, the prediction markets platform, has been forced to shut down its sports, election, and entertainment contracts in Nevada after a state court issued a temporary restraining order.
The order came on March 20 after the Nevada Gaming Control Board asked the court to step in. The regulator argued that Kalshi has been running what it considers unlicensed gambling in the state.
This makes Nevada the first state to successfully force Kalshi to geofence its core products. The company has long claimed its operations are legal in all 50 states.
Nevada Gaming Control Board Chairman Mike Dreitzer pushed back on that claim directly. He said Kalshi’s statement that it operates legally in all 50 states “is clearly not true.”
The board considers Kalshi’s event-based contracts to be wagering activity under Nevada state law. Under those statutes, offering such products without a gaming license is illegal.
Kalshi Restricts Markets But Pushes Back
Kalshi told its Nevada users in an email that markets related to sports, entertainment, and elections are now restricted. Users can still sell existing positions or let them settle, but they cannot open new ones.
Other contract categories like crypto, weather, and world news remain available to Nevada users.
The company made clear it disagrees with the restrictions. Kalshi called the situation “unprecedented” and said Nevada is the only state with such temporary restrictions in place.
Kalshi also asked its Nevada users to contact their state representatives. The company urged them to voice support for open access to regulated prediction markets.
The TRO is in effect for at least 14 days. A court hearing is scheduled for April 3 to determine whether the restrictions will continue.
If Kalshi wins at that hearing, it could resume offering the restricted contracts. If the court extends the order into a preliminary injunction, the block could stay in place much longer.
Legal Challenges Grow Across the Country
Nevada is not the only state creating legal problems for Kalshi. Arizona recently became the first state to pursue criminal charges against the company.
On the same day Arizona moved forward, a federal judge denied Kalshi’s request for emergency relief. The judge also raised questions about whether the case even belongs in federal court.
Florida may be next in line. Recent comments from Governor Ron DeSantis suggest the state is looking into whether prediction markets like Kalshi comply with existing laws.
On March 20, Kalshi co-founders Tarek Mansour and Luana Lopes Lara were named in a federal class-action lawsuit filed in Georgia. The company’s Chief Compliance Officer, Joshua Beardsley, was also named.
That Georgia lawsuit adds to a growing list of class-action complaints filed against the company.
Under Nevada law, operating unlicensed gambling is a felony. It carries fines of up to $50,000 and up to 10 years in prison.
