Kalshi officially exited Nevada on Saturday, March 21, after a state court judge issued a temporary restraining order the day before barring the prediction market from operating in the state. An email to Nevada customers on Saturday morning explained: “Due to a temporary court order, our markets related to sports, entertainment, and elections are being restricted in Nevada. You can still sell your positions or wait for them to resolve, but you won’t be able to buy new contracts…All of our other markets — including crypto, weather, and world news — are still available.”

Kalshi joins Polymarket, Coinbase, and Robinhood, all of which have already exited or restricted their event contract offerings in Nevada under regulatory pressure. It’s the first time any U.S. state has compelled Kalshi specifically to go dark. And unlike most legal setbacks the company has navigated over the past year, this one came with no immediate off-ramp: temporary restraining orders are not appealable under Nevada law. Kalshi was required to leave, at least until its preliminary injunction hearing April 3, but noted their protest in the customer email:

“This situation is unprecedented — Nevada is currently the only state with temporary restrictions in effect due to a court order. We disagree with those restrictions, but as a law-abiding company, we’re following them. We’re confident in our legal position, and we’ll continue to fight for your right to trade the same products that are available in 49 other states.”

As states continue shifting legal strategies, newly installed CFTC Chair Mike Selig has made clear the commission intends to weigh in on behalf of federally regulated exchanges. It’s possible we see the CFTC weigh in ahead of two crucial hearings set for April 3.

The Nevada road to Saturday’s exit passed through nearly 12 months of litigation. The NGCB sent Kalshi a cease-and-desist in March 2025. Kalshi responded by suing in federal court, and initially won a preliminary injunction that kept it operating in the state. That injunction was dissolved in November 2025, when U.S. District Judge Andrew Gordon ruled that Kalshi’s interpretation of federal preemption was “strained” and that treating prediction markets as exempt from state gambling laws would “upset decades of federalism.”

From there, Kalshi tried twice more to stay in federal court: first by attempting to remove Nevada’s state court lawsuit to federal jurisdiction, then by seeking an emergency stay at the Ninth Circuit. Both failed. On March 19, the Ninth Circuit denied the stay. On March 20, First Judicial District Court Judge Jason Woodbury issued the TRO, finding the NGCB had “a reasonable likelihood of success on the merits” and that the harm to the state was “irreparable and non-compensable.”

The judge granted a “temporary restraining order to prohibit Kalshi from offering or facilitating the offering of sports, elections, and entertainment-related event contracts in Nevada from allowing its market to accept wagers on those events from persons under the age of 21 in Nevada.”

In its official press release, the Nevada Gaming Control Board cited Kalshi’s operations as violations of NRS 463.160, NRS 463.350, NRS 465.086, and NRS 465.092. Board Chairman Mike Dreitzer said in a statement: “Prediction markets, to the extent they facilitate unlicensed gambling, are illegal in Nevada, and we have a statutory duty to protect the public. We want people in the state to wager safely at a licensed book.”

The TRO runs 14 days, with a preliminary injunction hearing set for April 3 at 1:30 p.m. PST in Carson City before Judge Woodbury.

Kalshi’s options from here are narrow. The most dramatic option previously at Kalshi’s disposal was petitioning a single Supreme Court justice for an emergency administrative order. But that option wasn’t pursued before the TRO landed, and the fact that Kalshi remains operational in 49 other states weakens any “irreparable harm” argument at that level.

Compliance isn’t on the table either as applying for a Nevada gaming license would undercut the preemption argument Kalshi is defending in more than a dozen other states simultaneously. Kalshi has also previously explained that pursuing state licensing is not an option for them as a federally-regulated derivatives exchange.

That leaves April 3 as Kalshi’s most realistic path back into Nevada. Unlike a TRO, a preliminary injunction is appealable, meaning a loss on April 3 reopens the full appellate runway, while a win would let Kalshi resume Nevada operations entirely. That makes this the most consequential single hearing in the Nevada saga since Judge Gordon dissolved the original injunction last November. And it seems probable the CFTC will weigh in on the matter on Kalshi’s behalf.

Nevada is currently only pursuing civil injunctive relief, but Wallach flagged on LinkedIn that the legal exposure runs considerably deeper. A law passed by the Nevada legislature in 2025 and effective October 1, 2025 upgraded violations of NRS 463.160 — conducting unlicensed gambling — to a “category B felony” under NRS 463.360, carrying 1-10 years in prison, fines up to $50,000, and mandatory disgorgement of all profits, gains, and gross receipts. The Board’s TRO explicitly cites NRS 463.160 as one of the statutes Kalshi is violating. Nevada hasn’t pulled the trigger on criminal enforcement, but it remains a possible level to pull.

That development comes just after Arizona became the first state to levy criminal charges against Kalshi. On March 17, Arizona AG Kris Mayes filed a 20-count criminal information in Maricopa County Superior Court alleging unlicensed gambling and election wagering. The charges are misdemeanor-level, carrying penalties of up to $20,000 per sports bet and $10,000 per election contract. As we reported at the time, Kalshi had filed a preemptive federal lawsuit against Arizona just five days earlier on March 12, a preemptive strategy that worked in New Jersey and Tennessee.

In Arizona, Federal Judge Michael Liburdi denied Kalshi’s TRO motion on March 16, and the criminal charges followed the next morning. Wallach noted at the time the Arizona charges “raise the stakes considerably” for other pending cases in the state. In her press release, Mayes made the state’s stance clear: “No company gets to decide for itself which laws to follow.”

States have tried a variety of approaches to push prediction markets out of their respective jurisdictions, with strategies shifting based on relative success. Massachusetts AG Andrea Campbell sued Kalshi in state court in September 2025, taking the approach to file first, before Kalshi could race to federal court. MA won a preliminary injunction in January 2026.

As Campbell’s office announced, Suffolk County Superior Court Judge Christopher Barry-Smith found that the CEA does not strip states of their authority to regulate gambling and dismissed Kalshi’s “irreparable harm” argument, writing that Kalshi had entered this business model “with eyes wide open” and “presumably prepared for that risk.”

A Massachusetts appeals court later granted Kalshi a stay while its challenge is reviewed, so Kalshi remains operational there for now, a key distinction from Nevada, where the TRO cannot be stayed or appealed. But the case has impacted other states’ legal approaches. Other states have leaned on the MA decision as supplemental authority in their own cases, with some also following the strategy to sue first, in state court.

Wallach’s running tally as of this week puts the fight at 11 wins for states: Arizona, Massachusetts twice, Maryland, Michigan, Nevada five times, and Ohio against just two wins for prediction markets, in New Jersey and Tennessee. His assessment: “Fortunes can change, but right now that’s just a bit south of the Mendoza Line for Kalshi, et al.”

Ohio is heading to the Sixth Circuit after Judge Sarah Morrison denied Kalshi’s motion for an injunction pending appeal on March 20, writing that Kalshi’s “preview of its disagreements” with her earlier PI denial “does not persuade the court to change its position.” Tennessee filed its notice of appeal of Kalshi’s PI win there the same week, heading to the same Sixth Circuit, where it now carries Ohio’s ruling as favorable intra-circuit precedent.

As Wallach put it: “We’re on to Cincinnati.” No federal appellate court has yet issued a ruling on the core preemption question. The Third, Fourth, and Sixth Circuits are all queued up, and the first decision could either stabilize the law or deepen a circuit split that puts the Supreme Court in play.

The CFTC has not been silent. When Arizona filed criminal charges, Chair Selig called it “entirely inappropriate as a criminal prosecution” and said the Commission was “watching closely and evaluating its options.”

The Arizona Attorney General today filed criminal charges against one of our registered exchanges related to prediction markets. This is a jurisdictional dispute and entirely inappropriate as a criminal prosecution. The @CFTC is watching this closely and evaluating its options.

The agency has already filed an amicus brief in the Ninth Circuit backing Crypto.com in a parallel Nevada dispute, and Selig announced a forthcoming Advanced Notice of Proposed Rulemaking on event contract markets.

The next cluster of critical dates is almost here. The Nevada preliminary injunction hearing is April 3 in Carson City. The Arizona federal PI hearing before Judge Liburdi is also April 3. Kalshi is also due to appear in Maricopa County court on April 13 for its first hearing on Arizona’s criminal charges. After one of the most turbulent weeks in prediction markets’ year-long legal clash with state gaming regulators, these upcoming hearings could prove pivotal.

The post Kalshi Forced Out of Nevada But April 3 Hearing Offers a Way Back In appeared first on DeFi Rate.

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