The market observation authority operating in Nevada has taken the legal process against the financial prediction platform Kalshi to a new stage. Kalshi, one of the leading prediction markets in the USA, offers various financial contracts with its structure regulated by the US Commodity Futures Trading Commission (CFTC) and has recently come to the fore with its contracts based on sports events. The company is at the center of this legal conflict that started in 2025.
Ongoing Legal Struggle
After the U.S. Court of Appeals for the Ninth Circuit denied Kalshi’s request for a stay, the Nevada gaming authority quickly filed a lawsuit against Kalshi in state court. The regulator states that the platform offers prediction contracts based on sports events without complying with the licensing rules applicable in the state of Nevada, which violates legal regulations. It is stated that the applications in question are similar to classical sports betting systems.
Federal and State Jurisdiction Debate
In his defense, Kalshi argues that the prediction market products he offers should be evaluated under federal law and are under the supervision of the CFTC. Therefore, Kalshi attempted to have the case moved back to federal court, making the state’s jurisdiction moot.
This dispute between Kalshi and Nevada raised jurisdictional debates about whether the platform is subject to state laws and regulations. While the company argues that its operations must adhere solely to federal standards, officials in Nevada argue that federal protections would not apply to those activities.
In the documents submitted to the court by the Nevada gaming authority, it was stated that the prediction contracts offered by Kalshi directed market participants to speculate on the outcome of sports events, and it was emphasized that this model exhibited a similar structure to classical betting products. Nevada authorities noted that Kalshi was operating without a state license, which was against the law.
Kalshi argued that his contracts traded under commodity market rules and should be subject only to federal regulations.
The first information reflected in the press was that Kalshi quickly took the case filed by Nevada to the federal court and requested that the state court withdraw the file. In the process, state agencies are seeking to prevent Kalshi from offering betting-like products in the state, seeking both a temporary injunction and preliminary injunction.
The outcome of the legal battle could be important not only for Nevada, but also for other platforms that offer similar prediction market applications. Some other states in the USA have also examined offers and practices related to the prediction market or initiated investigations against such platforms.
Impact and Widening Debate at the Federal Level
The national dimension of this issue was brought into sharp focus by the public statements of CFTC Chairman Mike Selig. Selig stated that financial derivative contracts are the basis of prediction markets and therefore the CFTC should undertake the task of supervising the market in question. The agency recently took an active role in a similar legal dispute between the company Crypto.com and Nevada.
Interest in prediction markets is gradually increasing with these legal processes. Trump Media & Technology Group stated that it is planning collaborations to integrate prediction markets through the social media platform Truth Social. These developments, especially in the fields of finance, media and politics, lead to discussion of legal and regulatory uncertainties regarding prediction market products.
