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

Nevada is asking the US Court of Appeals for the Ninth Circuit to deny Kalshi’s request to pause the case while it appeals, saying the company is unlikely to win and can’t use federal law to sidestep state gambling rules.

In its filing, the state argues that Kalshi’s products don’t qualify as swaps, options, or futures under federal law, and therefore aren’t protected by the Commodity Exchange Act. Because of that, Nevada says it still has the authority to regulate the activity as gambling within its borders.

Responding to Kalshi's argument that an injunction is necessary because a state enforcement proceeding would be "catastrophic," Nevada snarks that "Kalshi already is subject to enforcement in Massachusetts, and its business has not collapsed." pic.twitter.com/URVfMUKoLo

— Andrew Kim (@akhoya87) December 30, 2025

Nevada also says Kalshi hasn’t shown it would suffer irreparable harm if the stay isn’t granted, which is a key requirement for getting one. “Submitting to a state enforcement proceeding ‘typically does not constitute irreparable harm,’” the State writes, because Kalshi “could raise any potential defense.” The filing adds that the enforcement action would merely “seek an order from the state court requiring Kalshi to comply with Nevada gaming law or stop operating in Nevada.”

The state also pushes back on Kalshi’s claim that enforcement would be economically devastating, arguing that the company hasn’t shown any real evidence that it would suffer that kind of harm. According to the filing, “Kalshi already is subject to enforcement in Massachusetts, and its business has not collapsed.”

Nevada also disputes Kalshi’s claim that complying 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) geofence their customers,” adding that such compliance “is just a cost of doing business” and “minuscule in comparison to Kalshi’s revenues.”

On the merits, Nevada says Kalshi’s reading of the Commodity Exchange Act would wrongly override the state’s authority to regulate gaming. 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 rulemaking about swaps.” The brief concludes that “[i]f only contracts traded on DCMs could be swaps, Section 2(e) would be meaningless.”

Battle between Nevada and Kalshi continues as regulator seeks rejection of stay

The filing comes as part of a broader legal fight over whether prediction markets like Kalshi should be regulated under federal commodities law or state gambling laws. As ReadWrite previously reported, a federal judge in Nevada recently lifted an injunction that had allowed Kalshi to keep operating in the state, finding that Nevada was likely to win on the merits.

Kalshi has argued in multiple courts that its event contracts are federally regulated financial instruments and not gambling. But Nevada, along with other states, says those markets look a lot like sports betting and should fall under state licensing and enforcement rules.

The Ninth Circuit hasn’t ruled yet on Kalshi’s request for a stay. Until it does, 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

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