Kalshi lawsuits against Nevada, New Jersey go in opposite directions after latest rulings

Summary

Kalshi has received mixed outcomes in two major state-level battles over prediction markets. A Nevada judge extended a temporary restraining order and granted preliminary injunctive relief stopping Kalshi from offering sports, election and entertainment contracts to Nevada users through to 17 April, while a federal appeals panel in the 3rd Circuit upheld a lower-court ruling in favour of Kalshi, finding the Commodity Exchange Act (CEA) likely preempts New Jersey regulation.

Content summary

In Nevada, Judge Jason Woodbury extended a TRO and signalled that Kalshi’s federal preemption argument did not carry weight there, describing sports betting and trading in sports contracts as “indistinguishable” and treating Kalshi’s activity as gaming prohibited under state law. A hearing involving Kalshi and other platforms is scheduled before the 9th Circuit on 16 April in San Francisco.

Conversely, a three-judge panel in the 3rd Circuit (2-1) sided with Kalshi, with Judge David Porter concluding Kalshi had a reasonable chance of proving both field and conflict preemption under the CEA because its sports-related contracts trade on a CFTC-licensed designated contract market. The dissenting judge characterised Kalshi’s products as sports gambling that can be regulated by states.

The rulings land amid a broader legal escalation: Kalshi previously beat the CFTC on political contracts in 2024, the CFTC has recently sued several states, and the Commission — led by Chair Michael Selig — has issued an advanced notice of proposed rulemaking on prediction markets with public comments open through 30 April.

Key Points

Nevada court extended a TRO and granted preliminary injunctive relief preventing Kalshi from offering certain contracts to Nevada residents through 17 April.
Judge Woodbury in Nevada rejected Kalshi’s federal preemption argument, equating Kalshi’s trading to prohibited gaming under state law.
The 3rd Circuit (New Jersey matter) ruled 2-1 that the CEA likely preempts state regulation of Kalshi’s contracts, favouring Kalshi on preliminary injunction grounds.
The split decisions highlight competing views on whether prediction markets fall under exclusive federal (CFTC) jurisdiction or can be regulated by states as gambling.
The CFTC is actively asserting authority — suing multiple states and issuing an ANPRM seeking comment on prediction markets (comments open until 30 April).
Kalshi’s legal battles are part of a widening array of cases (federal, state, tribal, civil and even criminal) that will shape the future of prediction markets and related products.

Context and relevance

Why this matters: the split rulings could produce conflicting precedents across circuits, raising the odds of Supreme Court involvement or further federal action. Operators, regulators, and investors should watch upcoming appellate hearings and the CFTC’s rulemaking closely — outcomes will affect product design, market access and who ultimately regulates prediction markets.

Author’s tone: Punchy — this is more than courtroom theatre. The decisions signal where regulators and courts may be headed on the state vs federal friction over novel financial betting products.

Why should I read this?

Short version — because if you work in betting, fintech, compliance or regulation, these rulings change the playbook. One court says states can block Kalshi; another says federal law blocks states from doing that. It’s messy, it’s fast-moving, and it will determine who gets to run prediction markets and under what rules. Saved you a scroll: read the details if you need to plan for market access or regulatory risk.