Kalshi Rejected by Appeals Court, Nevada Ban Takes Effect Impacting Prediction Market Business

Gate News reports that on March 20th, the Ninth Circuit Court of Appeals in the United States denied Kalshi’s emergency motion, allowing Nevada to continue enforcing the temporary restraining order against its sports betting contract business. This means the case will return to federal court for further proceedings, and state regulators may take enforcement actions during this period.

According to the ruling, Kalshi will be unable to operate in Nevada for at least the next 14 days. Gaming attorney Daniel Wallach pointed out that such temporary restraining orders are generally not appealable under state law, and companies are required to suspend operations before the preliminary injunction hearing. Previously, Nevada regulators issued a cease and desist order in March, deeming its sports betting contracts as unlicensed gambling activities.

Kalshi argues that its products should be regulated by the U.S. Commodity Futures Trading Commission, as they are federally regulated derivatives contracts rather than traditional sports betting. The company also warned that state-level intervention could cause significant business losses. Additionally, legal documents indicate potential conflicts between federal and state laws, which could lead to jurisdiction disputes.

Meanwhile, the trading volume in prediction markets continues to grow. Data shows that platforms including Kalshi now have weekly trading volumes exceeding $2 billion, attracting regulatory attention from multiple states. Connecticut, New York, New Jersey, and others have begun reviewing similar products, including platforms like Polymarket.

Market analysts believe this case could become a key example in defining the boundaries between prediction markets and gambling, with its outcome directly impacting the development of the U.S. crypto derivatives and event contract markets.