March 20, 2026 — A Nevada judge has issued a temporary order blocking the prediction market platform Kalshi from operating in the state, marking a significant escalation in the legal challenges facing the fintech company. The ruling represents a victory for state regulators who argue Kalshi’s activities constitute illegal gambling.
Court Order Halts Operations
Judge Jason D. Woodbury granted the Nevada Gaming Control Board’s request for a temporary restraining order against Kalshi. Court documents show the judge found that Kalshi was not licensed under the Nevada Gaming Control Act. Woodbury determined the platform’s practice of taking a commission from contracts purchased through its system qualified as operating a “percentage game,” which state law defines as gambling.
The judge scheduled a hearing on the restraining order for early April. Nevada officials sued Kalshi in February, alleging the platform failed to acquire proper state gaming licenses. Regulators also contend Kalshi violates state law by allowing users under age 21 to access its services.
Federal vs. State Jurisdiction Dispute
Kalshi has argued its registration with the federal Commodity Futures Trading Commission (CFTC) places it under that agency’s exclusive regulatory domain, which should exempt it from state gambling laws. However, Judge Woodbury noted in his order that the issue of whether federal law overrides state law in this context remains unsettled. He observed that courts have not been leaning toward federal preemption in recent rulings.
The company declined to comment on the Nevada development when contacted by TechCrunch. This legal argument is central to Kalshi’s defense in multiple states.
Growing State Legal Challenges
The Nevada case is part of a widening crackdown by state authorities against prediction markets. Earlier this week, Arizona’s Attorney General filed a 20-count criminal complaint against Kalshi, accusing it of running an illegal gambling business. According to Reuters, Nevada has previously convinced judges to ban Kalshi competitors like Coinbase and Polymarket.
These state actions collectively argue that platforms like Kalshi and Polymarket are illegal operations skirting state gambling regulations. The cases signal a coordinated effort by state regulators to assert control over the burgeoning prediction market industry.
Federal Regulators Push Back
In contrast to state officials, federal regulators have positioned themselves as protectors of the prediction industry. Following Arizona’s criminal charges, CFTC Chairman Mike Selig publicly criticized the move. He posted online that the prosecution represented a “jurisdictional dispute and entirely inappropriate as a criminal prosecution.”
Selig stated the CFTC was “watching this closely and evaluating its options.” This public support highlights the growing regulatory rift between state and federal authorities.
What Comes Next
The temporary ban in Nevada intensifies the legal pressure on Kalshi as it fights similar battles across the country. The company’s upcoming hearing in Nevada court will be a critical test of its jurisdictional argument. The conflicting stances of state gambling boards and the federal CFTC have virtually guaranteed a prolonged regulatory battle over the future of prediction markets in the United States. The outcome could set important precedents for how innovative financial platforms are governed under America’s patchwork of state and federal laws.
For more information on the CFTC’s regulatory framework, visit the official Commodity Futures Trading Commission website. Details on Nevada’s gaming regulations can be found through the Nevada Gaming Control Board.
This article was produced with AI assistance and reviewed by our editorial team for accuracy and quality.
