Kalshi halted wagering on sports, entertainment, and elections in Nevada late Saturday afternoon, a day after a state judge issued a 14-day ban pending a hearing for a preliminary injunction.
Judge Jason Woodbury issued the temporary restraining order Friday and said in his ruling that Nevada is likely to prevail when he holds a hearing April 3 in Carson City.
Woodbury’s TRO was announced Friday morning and Kalshi continued to take deposits and accept wagers from Nevada residents on Saturday, then sent customers an email followed by a text alert late Saturday afternoon.
“Due to a temporary court order, our markets related to sports, entertainment, and elections are being restricted in Nevada,” Kalshi said in the email to customers. “You can still sell your positions or wait for them to resolve, but you won’t be able to buy new contracts. All of our other markets — including crypto, weather, and world news — are still available.”
In its email, Kalshi called the action unprecedented, citing Nevada as the only state with temporary restrictions due to a court order.
“We disagree with those restrictions, but as a law-abiding company, we’re following them,” Kalshi said. “We’re confident in our legal position, and we’ll continue to fight for your right to trade the same products that are available in 49 other states. Citizens of Nevada should not be forced into a business model designed to penalize winners and maximize user losses.”
Kalshi went on to encourage its customers to contact their Nevada representatives and let them know they support “open access to regulated prediction markets.” A Nevada lawmaker is trying to stop them in Congress.
Prediction markets fall under the jurisdiction of the Commodity Futures Trading Commission, but states like Nevada argue what Kalshi offers is gambling and that falls under the jurisdiction of state regulators. It cuts into Nevada’s tax revenue that funds state operations.
Friday’s ban by Judge Woodbury came a day after the Ninth Circuit Court of Appeals denied Kalshi’s stay that would have prevented a Nevada ban.
The American Gaming Association President and CEO Bill Miller released a statement late Friday.
“We strongly agree with (Gaming Control Board Chair Mike) Dreitzer’s remarks today that prediction markets are offering illegal sports wagers in Nevada and applaud the state’s decisive enforcement to uphold its laws, protect its consumers, and defend the integrity of its regulated market.”
In his ruling, Woodbury cited Kalshi’s accepting wagers from those under 21, which violates state law. Nevada gaming regulators also are best positioned to monitor sports integrity, he added.
Kalshi has faced some legal setbacks in addition to the ban in Nevada. Arizona prosecutors filed criminal charges against the company, accusing the platform of running illegal gambling. The 20-count complaint alleged that Kalshi operates a gambling business in Arizona without a license and takes illegal bets on elections.
Kalshi co-founder Tarek Mansour vowed to fight criminal charges, calling Arizona’s recent move a “total overstep” as legal battles with states escalate beyond civil enforcement.
Jeff Victor, a vice president with Circa Resort & Casino, touched on prediction markets at a program last week hosted by the Vegas Downtown Alliance. He did not hold back his criticism and applauded Arizona’s actions and threats the industry has for Las Vegas.
“What a scam this is,” Victor told the audience at the Las Vegas Civic Center in downtown. “Arizona filed criminal charges against Kalshi, a great step forward. Several states have made moves on Polymarket and others. Even in their own advertising, they use the term ‘bet.’ It has the backing of the White House, which is really disappointing and raises the bar in terms of a challenge to regulate them properly. It’s a terrible thing for the state of Nevada. It generates zero jobs in the state. It generates zero tax dollars in the state. It doesn’t build a building. It does nothing but take away money from the state and all of us in this room.”
Florida gaming attorney Daniel Wallach said he expects other states to follow Arizona’s path to file criminal charges and Nevada’s lead to stop prediction markets in state courts rather than federal court.
“Arizona did a smart strategy,” Wallach said. “Operating unlawful and unregulated gambling is a criminal violation. I was surprised no state had pursued criminal enforcement against Kalshi until Arizona. Besides being warranted based on Arizona law, it also has the additional benefit of preventing federal court interference with ongoing state criminal proceedings.”
Wallach said Kalshi not only has a court date in Nevada on April 3, but one in Arizona on the same day in federal court on the operator’s motion of a preliminary injunction against the state. The initial appearance on the criminal case is on April 13, he said.
Wallach said the record for states against prediction markets for temporary restraining orders and preliminary injunctions is 13-2, favoring the states, based on his scorecard with Kalshi winning in New Jersey and Tennessee so far.
“What began as a seemingly insurmountable advantage for Kalshi quickly pivoted into a cascade of rulings favoring states, beginning with a Maryland decision on August 1,” Wallach said.
Kalshi and prediction markets came up last week before the Economic Club of Las Vegas that featured two Wall Street analysts as speakers, Barry Jonas, managing director with Truist Securities, and John DeCree, director of equity research at CBRE. They talked about the risk of prediction markets to the casino gaming industry.
“Prediction markets are a hot topic and Nevada is at the center of it. Kudos to Mike Dreitzer and the Gaming Control Board for taking the lead here, which makes sense given how important the land-based business is,” Jonas said. “Is there a real risk? What we have heard from DraftKings is it’s a low single-digit cannibalization today to online sports betting, but the question is, what that becomes over time. There’s a lot of uncertainty there, whether that will happen or not. It is a risk that without guardrails, you can see a much more observable impact.”
DeCree talked about Kashi last week securing a $22 billion valuation after raising $1 billion in new funding. It is now the leader in the prediction market space, outpacing Polymarket. DeCree noted Kalshi’s valuation “makes it one of the largest” gaming companies and wasn’t concerned about its impact on Las Vegas.
“What they have done well is address the consumer with their app and interface,” DeCree said. “At the end of the day, it is hard to replicate the experience. About 55 percent come (to Las Vegas) for vacation and only 8 to 9% say the primary reason they come is for gaming. When you talk about prediction markets and trying to cannibalize Las Vegas, I’m a Las Vegas bull and don’t see that happening. That’s more of an issue in the regional markets. People are coming to Las Vegas for a lot more. It will be interesting to see how it plays out legally. Las Vegas is insulated for now.”
