Ninth Circuit Denies Kalshi’s Motion For Stay in Nevada, Geofencing May Be Next

• The U.S. Ninth Circuit Court of Appeals today denied Kalshi’s emergency motion for administrative stay
• The Nevada Gaming Control Board immediately filed civil enforcement against the company after the denial
• Kalshi may be forced to geofence Nevada to prohibit certain event contracts for customers

The walls may be closing in on Kalshi in Nevada, as the U.S. Ninth Circuit Court of Appeals denied Kalshi’s emergency motion for administrative stay, which may lead to the state being geofenced off from certain event contracts.

Kalshi filed its motion on Feb. 11. After its denial, the Nevada Gaming Control Board (NGCB) on Tuesday filed civil enforcement action in the District Court for Carson City against Kalshi, asking the court for an injunction to stop the company from offering unlicensed sports betting in violation of Nevada law.

“The board continues to vigorously fulfil its obligation to safeguard Nevada residents and gaming patrons, and uphold the integrity of a thriving gaming industry,” NGCB Chairman Mike Dreitzer said in a press relesae.

Is Geofencing Next for Nevada?

A Sports Betting Dime request for comment from Kalshi was not returned on Tuesday.

The NGCB considers sports event contract, and certain other event contracts, to constitute illegal sports betting activity under state law. The board filed an application for an immediate temporary restraining order and motion for preliminary injunction against Kalshi, which would likely require the company to geofence Nevada and prohibit the trading of sports event contracts.

According to Daniel Wallach, a sports betting and gaming attorney, Kalshi may next be filing an emergency application to the U.S. Supreme Court emergency docket.

Kalshi’s appeal came after a December decision from federal judge Andrew Gordon, who denied Kalshi’s motion for stay of Gordon’s previous decision to dissolve Kalshi’s preliminary injunction in the state.

Gordon dissolved a preliminary injunction in late November he granted Kalshi earlier in the year, sending the state of sports event contracts in Nevada into flux.

Still Working it Out in Nevada

KalshiEX LLC filed its lawsuit against the NGCB for a cease-and-desist notice sent to the company regarding their sports event prediction markets last March.

The Nevada Gaming Control Board levied a cease-and-desist notice against Kalshi in early March, ordering the company to stop offering its sports event contract markets in the state by March 14. Kalshi did not acquiesce to the notice.

Kalshi argues that Congress previously gave the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction to regulate futures trading on approved exchanges. As the CFTC has allowed Kalshi to launch its sports event contract markets, state law cannot “intrude on the comprehensive federal scheme for regulating designated exchanges.”