Court Denies Kalshi’s Motion for Stay in Nevada, Now At Risk of Enforcement

• Nevada federal judge Andrew Gordon denied Kalshi’s motion for stay in Nevada
• Kalshi requested the stay in hopes it would continue to offer its sports event contracts in the state throughout the court of its lawsuit
• Kalshi will likely file a motion with the U.S. Court of Appeals for the Ninth Circuit in order to keep offering its contracts in Nevada

Kalshi may now be vulnerable to enforcement action from the Nevada Gaming Control Board, as federal judge Andrew Gordon denied Kalshi’s motion for stay of Gordon’s previous decision to dissolve Kalshi’s preliminary injunction in the state.

Gordon’s ruling now leaves Kalshi vulnerable to enforcement action from the state if it continues to offer sport event contracts in Nevada.

Kalshi will likely file a motion with the U.S. Court of Appeals for the Ninth Circuit in an attempt to keep offering its contracts in the state.

Change in Course for Nevada

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.

Gordon’s latest order was brief, citing his decision to deny Kalshi’s latest request “for the reasons articulated in my order dissolving the preliminary injunction.”

In his order dissolving the preliminary injunction, Gordon wrote that his original decision on the injunction was “issued very early in this litigation on an accelerated schedule. The law and facts have evolved in this court and others.”

Circumstances will likely continue to change as other states rule on similar lawsuits involving Kalshi and Crypto.com, he said.

“Kalshi now contends that it is not taking sports bets and, even if it were, no state can regulate it because it is a DCM under the CFTC’s exclusive jurisdiction. Kalshi relies on a strained reading of the already convoluted Commodities Exchange Act in an attempt to evade state regulation. Kalshi’s interpretation would require all sports betting across the country to come within the jurisdiction of the CFTC rather than the states and Indian tribes. That interpretation upsets decades of federalism regarding gaming regulation, is contrary to Congress’ intent behind the CEA, and cannot be sustained,” Gordon wrote.

He continued, noting that the injunction will be dissolved because Kalshi is not likely to succeed on the merits of its lawsuit, although “there are serious questions on the merits.”

Without the stay, the Nevada Gaming Control Board can now take civil and criminal enforcement action against Kalshi for offering its sport event contracts in the state. An appeal in a higher court is the last chance Kalshi has for a stay.

Appeal Likely Coming

According to Daniel Wallach, a sports betting and gaming attorney, a motion from Kalshi to file an appeal with the U.S. Court of Appeals for the Ninth Circuit is “imminent.”

KalshiEX LLC filed its lawsuit against the Nevada Gaming Control Board (NGCB) for a cease-and-desist notice sent to the company regarding their sports event prediction markets earlier in the year.

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.