Nevada urges Ninth Circuit to reject Kalshi’s stay, defending gambling authority

Nevada asks the U.S. Court of Appeals for the Ninth Circuit to reject Kalshi’s request to stay the case as he appeals, saying the company is unlikely to win and cannot use federal law to circumvent state gaming rules.

In his depositThe State argues that Kalshi’s products are not considered swaps, options or futures under federal law and therefore are not protected by the Commodity Exchange Act. For this reason, Nevada says it still has the authority to regulate this activity as gambling within its borders.

Responding to Kalshi’s argument that an injunction is necessary because state enforcement proceedings would be "catastrophic," Nevada doesn’t care "Kalshi is already subject to prosecution in Massachusetts and his activities have not collapsed." pic.twitter.com/URVfMUKoLo

-Andrew Kim (@akhoya87) December 30, 2025

Nevada also claims that Kalshi has not shown that he would suffer irreparable harm if the stay is not granted, which is an essential condition for obtaining one. “Submitting to state enforcement proceedings ‘generally does not constitute irreparable harm,'” the state writes, because Kalshi “could raise any potential defense.” The filing adds that the enforcement action would simply be to “seek a state court order requiring Kalshi to comply with Nevada gaming law or cease operations in Nevada.”

The state also rejects Kalshi’s claim that enforcing the law would be economically devastating, arguing that the company has shown no real evidence that it would suffer that kind of harm. According to the filing, “Kalshi is already subject to prosecution in Massachusetts and his business has not collapsed.”

Nevada also disputes Kalshi’s assertion that compliance with state law would create unreasonable operational burdens, including the need to implement geofencing. The brief notes that “to comply with state gaming laws and the Wire Act, other Internet betting companies (including prediction markets) geolocate their customers,” adding that such compliance “is just a cost of doing business” and “minuscule in comparison to Kalshi’s revenue.”

On the merits, Nevada asserts that Kalshi’s reading of the Commodity Exchange Act would improperly overstep the state’s authority to regulate gambling. The State rejects Kalshi’s claim that its contracts qualify as federally regulated swaps, pointing out that “the CEA’s definition of ‘swap’ does not require trading” and that the Commodity Futures Trading Commission “did not require trading in its swap rules.” The brief concludes that “[i]If only contracts traded on DCMs could be swaps, section 2(e) would be meaningless.

Nevada-Kalshi battle continues as regulator seeks to overturn suspension

The filing is part of a broader legal battle over whether prediction markets like Kalshi should be regulated by the federal Commodities Act or by state gambling laws. As ReadWrite previously reported, a federal judge in Nevada recently lifted an injunction this had allowed Kalshi to continue operating in the state, believing that Nevada had a strong chance of winning on merit.

Kalshi has argued in several courts that its event contracts are federally regulated financial instruments and no game. But Nevada, along with other states, says these markets are a lot like sports betting and should be subject to state enforcement and licensing rules.

The Ninth Circuit has not yet ruled on Kalshi’s request for a stay. In the meantime, Nevada’s enforcement authority remains in place, meaning Kalshi could be barred from offering contracts to users located in the state.

Featured image: Kalshi / Canva

The position Nevada urges Ninth Circuit to reject Kalshi’s stay, defending gambling authority appeared first on ReadWrite.

Source link