Nevada Judge overturns Kalshi’s key court victory
A federal judge in Nevada has reversed an earlier decision that favoured Kalshi, a prediction markets operator. The ruling has renewed debate over whether event‑based trading platforms should be regulated under federal commodities law or state gambling rules. The decision affects Kalshi and could influence the wider prediction market industry in the United States, raising questions about the future of event trading, betting, and financial regulation.
Judge Gordon’s new ruling
In early 2025, Judge Andrew Gordon granted Kalshi a preliminary injunction that stopped Nevada regulators from acting against the company. The court accepted, for the time being, that Kalshi’s CFTC registration shielded it from state oversight. This allowed Kalshi to continue operating while contesting Nevada’s position, but the ruling was later reversed.
On 24 November 2025, Judge Gordon dissolved his earlier injunction and sided with Nevada regulators. He ruled that Kalshi’s reading of federal commodities law would place sports betting under federal jurisdiction, disrupting the established system of state control over gambling. The judge stated that Kalshi’s position “upsets decades of federalism regarding gaming regulation” and goes against congressional intent in the Commodity Exchange Act.
Kalshi’s argument and Nevada’s counterargument
Kalshi argues that, as a CFTC‑regulated exchange, it falls under federal jurisdiction. The company says its contracts are financial instruments rather than gambling wagers. A spokesperson described Kalshi as a nationwide exchange for real‑world events, distinct from state‑regulated sportsbooks and casinos.
Nevada’s gaming regulators argue that Kalshi’s event contracts are essentially bets. Because Kalshi does not hold a Nevada gaming licence, they consider its operations illegal in the state. When regulators issued a cease‑and‑desist order in March, Kalshi responded with a lawsuit, which first led to an injunction and later to its reversal.
Judge Gordon stressed the balance of power between federal and state governments. He wrote that Kalshi’s interpretation of the law would place sports betting under federal derivatives jurisdiction, changing how gambling is regulated in the United States. He concluded that Congress did not intend for the Commodity Exchange Act to override state gaming laws.
Implications for other states
Nevada’s ruling against Kalshi has wider implications, with similar disputes emerging in other states. New Jersey granted the company an injunction earlier in the year, while Maryland rejected its claim. California sided with Kalshi in tribal land cases, and Wisconsin tribes are currently suing to block its operations. This mix of conflicting outcomes across jurisdictions increases the likelihood that the U.S. Supreme Court will eventually be required to resolve the issue.
Kalshi’s response and future plans
Kalshi has said it disagrees with the ruling and plans to appeal to the Ninth Circuit. The company aims to secure an appellate decision that could confirm federal protections and provide clarity for the wider market.
a Kalshi spokesperson said in a statement, “We respectfully disagree with this decision. As other courts have recognized, 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.”
The ruling also affects sportsbooks such as DraftKings and FanDuel, which have considered prediction markets. Regulators have warned that licences could be at risk if similar products are launched without state approval.
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