Kalshi, Polymarket Face Trading Halt In Nevada After Court Rulings

Two recent US federal court rulings have heightened the risk that Nevada regulators might attempt to stop prediction market trading within the state. A federal judge determined that federal laws, such as the Commodity Exchange Act, do not entirely override state gaming regulations for these markets. This decision allows the Nevada Gaming Control Board to continue its enforcement case in state court. There, they could seek an order preventing Nevada residents from accessing prediction contracts from companies like Polymarket and Kalshi. In response to this development, Polymarket’s parent company filed a request for a temporary administrative stay. These rulings come amid increasing pressure on prediction markets from state regulators. Kalshi, for instance, has been engaged in a legal battle with Nevada since 2025. Another federal judge recently returned Nevada’s action against Kalshi to state court, potentially leading to an immediate order restricting Kalshi’s offerings in Nevada. Legal observers suggest this could encourage other states to pursue similar legal strategies. Kalshi had initially sued Nevada after receiving a cease-and-desist order regarding its sports betting markets. This legal fight also occurs amidst concerns about insider trading within prediction markets. Recent events have highlighted suspected insider activity benefiting from foreknowledge of investigation outcomes and political events. These concerns add another layer of scrutiny to the prediction market industry.