Carson City judge orders end to Kalshi sports outcome contracts in Nevada

The prediction market operator that has been in a legal dispute with Nevada gaming regulators for more than a year on Friday was banned by a Carson City judge from writing contracts involving sports results with Nevada residents.

Carson City District Court Judge Jason Woodbury also is giving Kalshi until May 4 to implement geofencing and or geolocation measures to prevent any user in Nevada from engaging in any activity or transaction deemed illegal under Nevada gaming laws as a result of the preliminary injunction he approved.

Woodbury issued his order from the bench following more than two hours of testimony in the First Judicial District Court.

Representatives of the Nevada Gaming Control Board and Kalshi had no comment on the hearing’s outcome late Friday.

The judge said if Kalshi can’t meet the May 4 deadline it may request an extension, but he’s requiring that the company fully explain why.

“Any request for an extension shall include an explanation of the degree to which geolocation or geofencing measures have been implemented, the progress which has been made in regard to any implementation that has not yet been completed, the remaining tasks to be completed, and an estimate of the time necessary to complete those tasks,” Woodbury said.

Judge says it’s gaming

In his ruling, Woodbury said there was no doubt that what Kalshi has been offering in its market is a form of sports wagering.

“The reality is I could take a $100 right now and walk a couple blocks and put a $100 on the Dodgers to win tomorrow,” Woodbury said. “I could also do that by depositing that money in a licensed operator’s online gaming application and do the same thing. And if it wasn’t restrained, I could also effectively do that with Kalshi with the purchase of a sporting event contract. No matter how you slice it, that conduct is indistinguishable. So I find based on the arguments that have been presented that it is a gaming activity that is prohibited for any non-licensee to engage in.”

But Woodbury also gave Kalshi time to develop a means to block Nevada customers from participating in its market through geofencing, a measure Kalshi has argued is prohibitively expensive.

Nevada sports-betting licensees geofence their apps to prevent betting from outside the state’s borders.

The hearing got complicated when the two sides argued about what types of prediction propositions could be offered.

Election and entertainment contracts

Deputy Attorney General Jessica Whelan said Nevada law also prohibits betting on election outcomes and certain entertainment propositions. She used an example of a prediction market contract involving the number of times a character on the television show “South Park” used a specific word.

“In Nevada gaming law, it talks about wagers on sports and ‘other events,’” Whelan said. “The scope of other events is what we are talking about. When you look at entertainment-related contracts, which would be something similar to the ‘South Park’ episode, who will win the Oscars, things basically relating to awards, television, movies, music, that’s the type of thing that we are targeting.”

Grant Mainland, a partner of the New York-based Milbank LLP law firm representing Kalshi in the hearing, gave no indication whether the company is making plans to appeal Woodbury’s ruling.

Kalshi and other prediction market platforms say the fact they are regulated by the federal Commodity Futures Trading Commission allows them to operate in all 50 states and in tribal jurisdictions and aren’t subject to state gaming laws.

New York-based Kalshi has been battling gaming jurisdictions across the country for months. There are six states whose courts have ruled in favor of the Gaming Control Board’s position — Nevada, Ohio, Michigan, Arizona and Massachusetts. Arizona’s challenge is a criminal complaint as opposed to others that are civil complaints.

Courts in two states have sided with Kalshi — New Jersey and Tennessee, with the New Jersey decision based on a preliminary injunction to Kalshi that has since been withdrawn.

CFTC regulation

Kalshi and other prediction markets are regulated by the CFTC, which oversees transactions involving commodities such as corn, wheat and soybeans.

Kalshi’s decision to offer trading on elections began in late 2024 and expanded to sports outcomes in early 2025. That’s when the Gaming Control Board first took notice and issued a cease-and-desist order in March that year. Kalshi responded with a lawsuit.

Nevada gaming regulators identified Kalshi’s operation as a form of sports wagering and took action to shut it down. But Kalshi has fought back and challenged every move regulators have made. The Control Board’s newest strategy was to take their legal challenges to state court instead of federal court where they found judges to be more attuned to state gaming laws.

Kalshi has tried to wage the fight in U.S. District Court, but lost an appeal in the Ninth Circuit Court that ordered the case back to Carson City.

The CFTC has offered a “friend of the court” brief on Kalshi’s behalf and a hearing in the Ninth Circuit Court is scheduled to be heard April 16.

Whelan said the Control Board now believes that 90 percent of Kalshi’s revenue comes from sports-betting contracts on its platform.