Bitaigen Research 
Over the past year, the legal dispute between Kalshi and the state of Nevada has continued to intensify. In March 2023 the company received a cease‑and‑desist order from state regulators and was forced to suspend all sports‑related market activities in the jurisdiction. In April, a federal district court briefly blocked Nevada from taking further action during the litigation, but that protection proved short‑lived.
The most recent development in September shows that the Ninth Circuit Court of Appeals rejected Kalshi’s attempt to prevent the Nevada Gaming Control Board from intervening in its sports‑event contracts. That ruling removed the legal barrier that had prevented the state from filing a civil enforcement suit against Kalshi. Immediately thereafter, the Nevada Gaming Control Board filed a complaint in state court, accusing Kalshi of offering gambling services without a license and thereby violating state law.
Confronted with the state‑court accusations, Kalshi promptly filed a motion to transfer the case to federal court and reiterated its long‑standing position—that under Commodity Futures Trading Commission (CFTC) regulations, the platform is exclusively governed by the federal Commodity Exchange Act. The company argues that the federal regulatory framework already fully covers its business model and that state‑level regulation should not impose additional constraints.
We will outline the latest legal clash between Kalshi and Nevada, analyze the jurisdictional boundaries between federal commodity regulation and state gambling enforcement, and explore the compliance pathways available to the platform. This should help readers gauge industry trends and understand the potential impact of the case on the future regulatory landscape for prediction markets in the United States.
Nevada Claims Kalshi Ignored State Law
In the new round of litigation, the Nevada Gaming Control Board again emphasized that Kalshi’s sports‑event contracts fall within the state’s definition of licensed gambling because the contracts essentially allow users to wager on the outcome of games. Although Nevada permits a variety of sports‑betting activities, the regulator points out that Kalshi has not obtained the required license and has failed to comply with the state’s gambling oversight requirements.
Kalshi’s federal motion counters that the state’s assertions force the court to adopt a narrow interpretation of the federal Commodity Exchange Act—an area that the CFTC is tasked with overseeing. The company maintains that federal rules are sufficient to cover its operational model and that state interference constitutes overreach.
CFTC Chair Asserts Authority Over Prediction Markets
On the same day, CFTC Chair Michael Seliger submitted an amicus brief expressing the commission’s stance on similar cases. The brief supports the favorable ruling obtained by Crypto.com in a separate lawsuit against Nevada regulators. Crypto.com had also received a state cease‑and‑desist order in June 2023, sued the state, and after its federal motion was denied, appealed to the Ninth Circuit.
In the brief, Seliger wrote: “States may not erode the CFTC’s exclusive jurisdiction over designated contract markets by recharacterizing on‑exchange swap transactions as illegal gambling.” He further explained that such contracts are commodity derivatives and should be regulated entirely by the CFTC, which will continue to defend its exclusive authority over commodity derivatives.
The timing of this position coincides with an announcement by Trump Media & Technology Group that it plans to partner with Crypto.com to turn its “Truth Social” platform into a prediction‑market venue. At the same time, Donald Trump Jr., who became a Kalshi advisor in January 2025 after investing in the company last August, has also provided advisory services to rival Polymarket.
Source: Daniel Volarch
Kalshi has not yet responded to the request for comment.
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