Key Moments:
- Judge Andrew Gordon rescinded an earlier injunction favoring Kalshi on November 24, 2025
- The ruling raises fundamental questions about the regulation of event-based trading and prediction markets in the United States
- Kalshi announced plans to appeal the decision to the Ninth Circuit, seeking federal protection for its operations
Judge Gordon Reverses Course on Kalshi’s Operations
A major regulatory development has unfolded in Nevada as District Judge Andrew Gordon overturned his previous ruling granting a preliminary injunction to Kalshi, a key player in the prediction markets industry. This reversal, delivered on November 24, 2025, sided with Nevada regulators, challenging Kalshi’s claim that its status as a CFTC-regulated exchange allows it to bypass state gambling oversight.
Arguments from Both Sides: Federal vs. State Regulation
Kalshi insists that their federally regulated platform operates as a marketplace for financial contracts on real-world events, not traditional gambling bets, and emphasizes their distinction from state-licensed sportsbooks and casinos. In response, Nevada’s gaming regulators have characterized Kalshi’s contracts as bets subject to state law, contending that the company is operating illegally within state lines due to its lack of a Nevada gaming license.
The dispute intensified following a cease-and-desist order issued by Nevada regulators in March, prompting Kalshi to file litigation that initially led to favorable court protection but was ultimately reversed by Judge Gordon’s latest decision. The judge wrote that Kalshi’s interpretation of the law “upsets decades of federalism regarding gaming regulation” and contradicted congressional intent behind the Commodity Exchange Act.
BREAKING: Nevada federal court dissolves preliminary injunction granted to Kalshi, finds that Kalshi's interpretation "relies on a strained reading of the already convoluted CEA," would "upset decades of federalism regarding gaming regulation and is contrary to Congress’ intent." pic.twitter.com/mNSRLTpO9k
— Daniel Wallach (@WALLACHLEGAL) November 25, 2025
National Implications and Legal Patchwork
The Nevada decision carries significant weight for similar cases arising across the nation. Other states have reached divergent conclusions: New Jersey issued an injunction in favor of Kalshi earlier in the year, Maryland determined otherwise, and California aligned with Kalshi within tribal land jurisdictions. Meanwhile, Wisconsin tribes are undertaking legal action to halt Kalshi’s activities, illustrating the complex and fragmented regulatory landscape. With these contradictory outcomes, the issue may ultimately require clarification from the U.S. Supreme Court.
| State | Regulatory Outcome |
|---|---|
| Nevada | Ruling against Kalshi, requiring state compliance |
| New Jersey | Granted injunction to Kalshi |
| Maryland | Rejected Kalshi’s position |
| California | Sided with Kalshi in tribal land cases |
| Wisconsin | Tribes actively suing to block Kalshi |
Kalshi’s Next Steps and Broader Market Impact
Following the unfavorable Nevada ruling, Kalshi has communicated its disagreement and intention to pursue relief in the Ninth Circuit Court of Appeals. The company continues to seek a definitive appellate ruling that protects its federal regulatory status and clarifies rules for other industry participants.
A Kalshi spokesperson said in a statement, “We respectfully disagree with this decision. As other courts have recognized, Kalshi is a regulated, nationwide exchange for real-world events, and it is subject to exclusive federal jurisdiction. It’s very different from what state-regulated sportsbooks and casinos offer their customers. We are evaluating the decision and anticipate making an appeal to the Ninth Circuit.”
The outcome of this legal battle may also affect major sportsbooks like DraftKings and FanDuel, which have explored the idea of offering event-based prediction markets. State regulators have warned these companies that their gaming licenses could be jeopardized if they introduce similar products without explicit state authorization.
- Author
Daniel Williams
