Nevada Moves to Void Kalshi Injunction After Key Court Rulings

The emergency filing with the U.S. District Court for the District of Nevada argues that recent changes in legal interpretation fundamentally weaken Kalshi’s claim to ultimate success in the lawsuit.

State Defendants, including Mike Dever, George Assad, Ken Sanchez, and the Nevada Gaming Control Board, are challenging the preliminary order entered on April 9, 2023, in the case identified as 2:23-cv-01805-GMN-BNW.

Legal expert Daniel Wallach noted the filing, saying a separate ruling on a competitor’s contracts “now makes clear that Kalshi is not likely to succeed on the merits.”

Shifting Definition of Swap Contracts

The core of Nevada’s argument rests on a recent court decision regarding event contracts from Kalshi’s competitor, Crypto.com. The state points to a court finding that Crypto’s sports event contracts do not qualify as “swaps” under the Commodity Exchange Act (CEA). This legal finding is the most critical change cited by Nevada’s defense.

The court reasoned that a sports event outcome is not the type of “event or contingency associated with potential economic, financial, or commercial consequence” that the CEA defines as a swap.

Nevada contends that Kalshi’s offerings share the same key features. The state claims Kalshi’s contracts are essentially wagers on sports outcomes, such as which team will win a specific game. This new court view directly contradicts the reasoning that led to the initial injunction protecting Kalshi.

Preemption Arguments Denied in Maryland

State defendants also cited a ruling from the District Court for the District of Maryland that further supports their position. In that case, the Maryland court assessed nearly identical claims brought by Kalshi against Maryland gaming regulators.

The Maryland court decided that Kalshi was unlikely to succeed on the merits there as well. Specifically, the court held that the CEA does not preempt all state gaming regulation, even if Kalshi’s event contracts qualified as swaps.

The Maryland decision stated that the CEA does not show Congressional intent to make the Commodity Futures Trading Commission (CFTC) the country’s sole gaming regulator. Nevada asserts this ruling undermines Kalshi’s core argument that federal law overrides all state gaming laws.

Proposed Court Schedule

Due to Wallach, the State Defendants proposed a strict timeline for the court to review the motion to dissolve the injunction. Under the proposal, Kalshi would be required to file its brief responding to the emergency motion by October 27, 2025.

The state defendants would then submit their final reply brief by November 3, 2025. This schedule aims to resolve the status of the preliminary order quickly, potentially allowing Nevada regulators to take enforcement action against the event contract platform.