In Nevada, KalshiEX LLC filed a lawsuit on 28 March after receiving a cease-and-desist order from the Nevada Gaming Control Board (NGCB) earlier that month.
The NGCB contends that Kalshi’s contracts on sports and election outcomes constitute illegal gambling under state law.
Specifically, the agency pointed to violations of Nevada Revised Statutes and Regulation 22, which require a sports pool licence for sports betting and ban election wagering.
Kalshi has countered that its event contracts are regulated financial instruments, not gambling products, and fall under the purview of the CFTC through the Commodity Exchange Act. The company further argues that federal law preempts Nevada’s regulatory attempts.
According to Kalshi’s legal filings, the state’s actions “intrude upon the federal regulatory framework” and infringe on Kalshi’s rights as a federally designated exchange.
Nevada and NJ cases following different timelines
Adding a layer of complexity, the Nevada Resort Association (NRA) is seeking to intervene in the case.
At a recent hearing, US District Court Judge Andrew Gordon acknowledged the urgency of resolving the matter and committed to a swift resolution on whether the NRA will be permitted to the lawsuit.
Gordon has established an expedited briefing schedule, with Kalshi’s opposition due by 22 May and the NRA’s reply due by 28 May.
Meanwhile in New Jersey, Kalshi secured a preliminary injunction against the Division of Gaming Enforcement after making similar arguments.
The federal court there concluded that Kalshi’s event contracts fall within the CFTC’s exclusive jurisdiction and that the state’s attempts to prohibit such contracts were likely preempted by federal law.
The court also agreed with Kalshi’s assertion that continued enforcement of state restrictions would cause irreparable harm to the company’s reputation and goodwill.New Jersey has appealed the preliminary injunction. The Third Circuit granted the state’s request to expedite the case, with opening briefs due by 10 June and all legal filings expected by 31 July.
The case will be scheduled for argument on the earliest available date thereafter. Given the expedited timeline, a decision could come before the end of 2025.
Based on federal court management statistics, even without expedition, appeals in the Third Circuit typically conclude within nine months, according to gaming law expert Daniel Wallach.
Kalshi seeks Maryland TRO
In Maryland, Kalshi has filed for a temporary restraining order (TRO) as it seeks to prevent the state from enforcing similar prohibitions while its case proceeds.
Citing the favourable preliminary injunctions granted in Nevada and New Jersey, Kalshi argues that courts have already recognised the CFTC’s exclusive jurisdiction over its market contracts.
The company also claims that, absent judicial intervention, it would suffer harm to its operations and public credibility that cannot be remedied after trial.
Kalshi’s filings in Maryland emphasise that two separate federal courts have acknowledged the likelihood of irreparable harm and have found that public interest does not enforcing laws that may be unconstitutional.
These courts have concluded that Kalshi’s contracts qualify as commodities regulated under federal law rather than bets subject to state gaming statutes.
While Kalshi’s position has so far been upheld in preliminary rulings, none of the cases have yet produced final judgments.
The central legal issue remains whether the Commodity Exchange Act gives the CFTC exclusive authority over Kalshi’s markets or whether states retain the right to prohibit them under gambling laws.
So far, despite much debate on the subject by analysts, gaming professionals and lawyers, there is no consensus on the answer to that question.
Until the issue is resolved at a higher level — potentially the US Supreme Court — Kalshi will likely remain entangled in litigation across multiple jurisdictions.
