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Nevada appealed to the US Court of Appeals for the Ninth Circuit to Kalshi’s request to drop the case was denied as it appealed, saying the company was unlikely to win and could not use federal law to circumvent state gambling rules.
In his FILINGthe state argued that Kalshi’s products did not qualify as swaps, options, or futures under federal law, and therefore were not protected by the Commodity Exchange Act. Because of that, Nevada says it has the authority to regulate the activity as gambling within its borders.
Responding to Kalshi’s argument that an order is necessary because a continuation of the implementation of the state "disaster," Nevada denies this "Kalshi is now subject to enforcement in Massachusetts, and its business has not collapsed." pic.twitter.com/URVfMUKoLo
– Andrew Kim (@akhoya87) December 30, 2025
Nevada also said that Kalshi has not shown that it will suffer irreparable harm if the stay is not granted, which is an essential requirement for obtaining it. “Submitting a state enforcement proceeding ‘does not ordinarily constitute irreparable harm,'” the State wrote, because Kalshi “can raise any potential defense.” The filing added that the enforcement action “simply seeks an order from a state court requiring Kalshi to comply with Nevada gaming law or cease operating in Nevada.”
The state also pushed back against Kalshi’s claim that the enforcement could harm the economy, arguing that the company had not presented any real evidence that it would suffer this type of harm. According to the filing, “Kalshi is already subject to enforcement in Massachusetts, and its business has not collapsed.”
Nevada also disputes Kalshi’s claim that compliance with state law would create unreasonable operational burdens, including the need to enforce geofencing. The brief notes that “to comply with state gaming laws and the Wire Act, some internet betting companies (including prediction markets) geofence their customers,” adding that such compliance is “just a cost of doing business” and “minimal compared to Kalshi’s revenue.”
On the merits, Nevada argued that Kalshi’s reading of the Commodity Exchange Act wrongly violated the state’s authority to regulate gaming. The State rejected Kalshi’s claim that its contracts qualified as federally regulated swaps, pointing out that “the CEA’s definition of ‘swap’ does not require trading,” and that the Commodity Futures Trading Commission “does not require trading in rulemaking regarding swaps.” The brief concludes that “(i)f only contracts sold by DCMs can be exchanged, Section 2(e) becomes meaningless.”
The battle between Nevada and Kalshi continues as the regulator seeks to overturn the stay
The filing comes as part of a broader legal battle over whether prediction markets like Kalshi should be regulated under federal commodity law or state gambling laws. As previously reported by ReadWrite, a federal judge in the Nevada recently lifted a mandate which allowed Kalshi to continue operating in the state, knowing that Nevada would likely win on the merits.
Kalshi has argued in several courts that its activity contracts are federally regulated financial instruments and not gambling. But Nevada, along with other states, says the markets are like sports betting and should fall under state licensing and enforcement rules.
The Ninth Circuit has yet to rule on Kalshi’s request for a stay. Until that happens, Nevada’s enforcement authority remains in place, meaning Kalshi could be barred from offering contracts to users located in the state.
Featured image: Kalshi / Canva
The post Nevada urged the Ninth Circuit to reject the Kalshi stay, which defended the gambling authority first appeared in ReadWrite.
