Kalshi Withdraws From Nevada as Fresh New Lawsuit Targets the Company’s Founders

(AsiaGameHub) –   Kalshi has been compelled to leave a U.S. state for the first time, temporarily halting access to its sports markets in Nevada after a judge issued a temporary restraining order (TRO) against the company. Legal disputes over the platform’s contentious sports prediction markets are escalating, and a new lawsuit has targeted Kalshi’s co-founders personally.

The Nevada Gaming Control Board (NGCB) announced the state issued the TRO on Friday. In a press release, Chairman Mike Dreitzer stated, “Kalshi has repeatedly claimed its operations are legal in all 50 states, which is clearly false.”

“Prediction markets that enable unlicensed gambling are illegal in Nevada, and we have a statutory duty to protect the public. We want Nevada residents to wager safely with a licensed bookmaker.”

The TRO remains in effect until April 3, when a hearing will be held. Kalshi’s departure from the state follows a judge’s denial of the company’s request for an administrative stay—something that would have allowed it to continue operating while the case proceeds.

Kalshi Confident in Legal Position

Kalshi emailed users on Saturday to confirm it would restrict Nevada users from accessing sports, entertainment, and election markets.

The email stated, “We’ll get straight to it. Due to a temporary court order, our sports, entertainment, and election-related markets are being restricted in Nevada. You can still sell your positions or wait for them to settle, but you won’t be able to buy new contracts.”

It added, “This situation is unprecedented—Nevada is currently the only state with temporary restrictions in place from a court order. We disagree with these restrictions, but as a law-abiding company, we’re complying. We’re confident in our legal stance and will keep fighting for your right to trade the same products available in 49 other states.”

Other states have issued unfavorable rulings against Kalshi but generally allowed the company to keep operating until those rulings are finalized. In Massachusetts, a judge granted the state an injunction, but Kalshi won a motion to stay from the appeals court.

Latest Lawsuit Names Kalshi Founders

As it battles state regulators across the country, Kalshi is also facing a wave of lawsuits from individuals and legal firms.

The latest filing specifically names Kalshi co-founders Tarek Mansour and Luana Lopes Lara. The company’s Chief Compliance Officer, Joshua Beardsley, is also named in the suit, which was filed in California.

As gaming lawyer Daniel Wallach highlighted, the lawsuit notes the defendants initially “admitted that Sporting Event Contracts have ‘no inherent economic significance.’”

During a hearing where Kalshi fought for the legal right to offer election markets, a company lawyer stated, “[Y]ou can see it in the congressional record, and they give three examples of gaming contracts: Football, horse racing, golf. They’re all games. It’s something that has no inherent economic significance. It’s done for amusement. It may be purely to facilitate betting itself for its own sake.”

The lawsuit alleges that despite “repeatedly recognizing this legal line in the sand, the Kalshi Defendants got greedy and crossed it in bad faith.”

Legal firms from four states filed the lawsuit on Friday. Unlike most litigation—which focuses on the company violating state gambling laws—the suit claims Kalshi is breaking the Commodity Exchange Act (CEA), the rulebook for prediction market platforms.

The CEA prohibits gaming-related markets, but the Commodity Futures Trading Commission (CFTC) has not opposed platforms offering sports markets. It has issued an advisory on sports markets but has not gone so far as to say these markets constitute gaming.

Despite mounting legal challenges, Kalshi recorded its second-highest single-day trading volume thanks to March Madness and surpassed $3 billion in weekly trading volume. The company was valued at $22 billion in a recent funding round.