On March 20, 2026, Judge Jason D. Woodbury of Nevada's First District Court granted the Nevada Gaming Control Board's application for a temporary restraining order against Kalshi, a CFTC-regulated event contracts exchange. The order prohibits Kalshi from offering or facilitating sports-, election-, and entertainment-related event contracts in Nevada.[i] Judge Woodbury found that Kalshi's contracts fall within Nevada's definitions of a "sports pool" and "percentage game" and therefore constitute unlicensed "gaming" under state law.
Judge Woodbury rejected Kalshi's argument that the Commodity Exchange Act (CEA) vests exclusive jurisdiction in the CFTC, preempting Nevada law. Although acknowledging that federal preemption in this area "is nuanced and rapidly evolving," the court concluded that existing authority weighs against federal preemption under these circumstances.[ii] The court relied on North American Derivatives v. Nevada,[iii] a federal district court opinion in which Crypto.com challenged Nevada's jurisdiction, and the court held that event contracts in question were not swaps under the CEA. The North American Derivatives decision is currently on appeal before the Ninth Circuit, where the CFTC has filed an amicus brief asserting that event contracts fall within its exclusive jurisdiction.[iv]
The Kalshi TRO is the latest in a series of Nevada court rulings equating event contracts with gaming activity. Earlier this year, the same court issued TROs against Coinbase and Polymarket,[v] reflecting a consistent view that such contracts constitute unlicensed gaming under Nevada law.
Against this backdrop of increasing enforcement activity and judicial interpretation of event contracts across jurisdictions, Congress has begun to engage more directly. On March 23, 2026, Senators Adam Schiff (D., Calif.) and John Curtin (R., Utah) announced proposed legislation that would (1) prohibit CFTC-regulated entities from listing contracts tied to sporting events and (2) prohibit "casino-style games" from being listed on prediction market platforms. The sponsors of this legislation emphasized concerns about consumer protection and the growth of sports-related contracts on prediction market platforms.
Together, the Nevada ruling and the proposed legislation underscore the increasingly multi-front nature of prediction market oversight, with state courts, federal regulators, and Congress advancing overlapping—and at times conflicting—approaches.
The Investigations and White Collar Defense Group at Venable is actively monitoring developments in the regulation of prediction markets and will continue to provide updates on key litigation, enforcement, and legislative activity.
[i] State ex rel. Nev. Gaming Control Bd. v. KalshiEx, LLC, No. 26 OC 00050 1B (Nev. Dist. Ct. Mar. 20, 2026).
[ii] Id. at 3.
[iii] Id. at 4 (citing N. Am. Derivatives Exch., Inc. v. Nev. Gaming Control Bd., No. 2:25-cv-00978-APG-BNW, 2025 LX 466366 (D. Nev. Oct. 14, 2025)).
[iv] Brief for the Commodity Futures Trade Commission as Amicus Curiae Supporting Appellant, N. Am. Derivatives Exch., Inc. v. Nevada, No. 25-7187 (9th Cir. Feb. 17, 2026).
[v] See State ex rel. Nev. Gaming Control Bd. v. Blockratize, Inc., No. 26 OC 00012 1B (Nev. Dist. Ct. Jan. 29, 2026); State ex rel. Nev. Gaming Control Bd. v. Coinbase Fin. Mkts., Inc., No. 26 OC 00030 1B (Nev. Dist. Ct. Feb. 5, 2026).