Kalshi dealt a direct blow by Nevada regulation…claim that sports contracts are 'derivatives' collapsed

Kalshi's operation of sports-based prediction markets has reached a significant inflection point in overall platform operations as it was determined that it cannot avoid Nevada state regulation.

On the 26th (local time), Bloomberg reported that the Nevada federal court lifted the injunction against Kalshi and allowed the state gaming authority to resume enforcement procedures. The court found that Kalshi's sports-related contracts, such as the timing of a football touchdown, were closer to betting in nature than derivatives.

Kalshi immediately expressed its intention to appeal and has again requested an emergency stay. The company warned that blocking only Nevada users could distort overall market liquidity and that positions worth hundreds of millions of dollars could be thrown into disarray.

The ruling is being seen as a signal that regulation of prediction markets may tilt toward state-level oversight rather than a single federal supervisor. With conflicting precedents emerging in state courts over digital-asset-style prediction contracts, the industry expects the matter could ultimately reach the U.S. Supreme Court.

Robinhood also sought a temporary restraining order in a similar matter, but the court dismissed it saying monetary harm can be remedied later. It is interpreted that the resumption of sports-contract operations for Nevada users influenced this.

Experts evaluate that this ruling bolsters the state regulatory trend that treats prediction markets as "subject to the same rules as sports betting." Kalshi warned that if regulatory conflicts persist, large-scale contract liquidations may be unavoidable, raising uncertainty across the market.