The Fortress Strikes: Nevada Shuts Kalshi Out During March Madness

Nevada’s gaming regulators secured a temporary restraining order against Kalshi on March 20, 2026 — the second day of the NCAA tournament’s Round of 64 — completing a systematic purge of every major prediction market operating in the state. The ex parte order from First Judicial District Court Judge Jason Woodbury is broader than many anticipated, blocking not just sports contracts but also election and entertainment event contracts for anyone within Nevada. With the TRO unappealable under state law, Kalshi’s only remaining escape hatch is an emergency application to the U.S. Supreme Court — a long shot that would land on Justice Elena Kagan’s desk. The ruling caps an extraordinary 12-month campaign by the Nevada Gaming Control Board, which declared it has now “successfully restricted the operation of all unlicensed prediction markets that had been known to be operating in Nevada.”

A $22 billion company gets locked out of the biggest betting weekend of spring

The timing was surgical. Kalshi had announced its $1 Billion Bracket Challenge on March 17 — a free-to-enter promotion insured by SIG Parametrics offering the full sum for a perfect 63-game bracket, plus $1 million guaranteed for the best imperfect entry. March 20, the day the TRO dropped, turned out to be Kalshi’s second-biggest trading day in history, with volume approaching $600 million driven almost entirely by NCAA tournament games. Hours earlier, the company had closed its fundraise at a $22 billion valuation — a fact that landed in the same news cycle as the order shutting it out of America’s most heavily regulated gambling state.

Judge Woodbury’s order prohibits Kalshi from “offering or facilitating the offering of sports-, election-, and entertainment-related event contracts” in Nevada and bars it from accepting trades on those events from anyone under 21 in the state. The scope surprised observers who expected the NGCB to target only sports contracts. By sweeping in elections and entertainment, the TRO effectively zeroes out Kalshi’s entire Nevada footprint. Whether the block operates through geofencing (IP-based) or residency verification remains unclear — Crypto.com’s earlier Nevada exit used residency information rather than geolocation, allowing out-of-state visitors to continue trading. The disposition of existing open positions for Nevada users is also unaddressed in the order’s reported text.

The TRO lasts 14 days, expiring April 3, when a preliminary injunction hearing will determine whether the ban extends for the duration of the litigation. Daniel Wallach, the gaming attorney who has emerged as the primary chronicler of prediction market litigation, expects the judge to convert the TRO into a longer-term injunction. Woodbury’s written findings leave little room for optimism on Kalshi’s side: he ruled the NGCB has a “reasonable likelihood of success on the merits,” that harm from unlicensed operations is “irreparable and non-compensable,” and that “the balance of convincing legal authority weighs against federal preemption in this context.”

Twelve months of losing in federal court led Kalshi here

The March 20 TRO is the final domino in a procedural chain that systematically stripped Kalshi of its federal court protections over the preceding year. Understanding how Kalshi went from winning an injunction in April 2025 to being locked out of Nevada in March 2026 requires tracing the sequence through three courts and five judges.

After the NGCB sent a cease-and-desist letter in March 2025, Kalshi filed a federal preemption lawsuit. In April 2025, U.S. District Judge Andrew Gordon granted a preliminary injunction, finding the CFTC likely had exclusive jurisdiction. But Gordon changed his mind after denying Crypto.com a similar injunction in October 2025.

“These are sports wagers and everyone who sees them knows it. That includes Kalshi, who has advertised itself as the ‘first app for legal sports betting in all 50 states.’ But Kalshi is not licensed to conduct gaming in Nevada or any other state.”
— Judge Andrew Gordon, U.S. District Court, November 2025

Gordon found Kalshi’s reading of the Commodity Exchange Act “would require all sports betting across the country to come within the jurisdiction of the CFTC rather than the states,” a result he called contrary to “decades of federalism regarding gaming regulation.”

Kalshi immediately appealed. In December 2025, it obtained a temporary non-enforcement agreement with the NGCB while the Ninth Circuit considered its stay motion. But on February 10, 2026, Nevada’s AG notified the court it would begin enforcement the following week. On February 17, the Ninth Circuit denied the emergency motion in a one-sentence order — and the NGCB filed a civil enforcement action in state court the same afternoon.

Kalshi promptly removed the case to federal court, but Judge Miranda Du remanded it on March 2, finding the case arose under state gambling law, not the CEA. Du rejected Kalshi’s federal question, complete preemption, and federal officer removal arguments. She also denied Kalshi’s emergency stay of the remand on March 12, writing that “litigating in state court is not a harm, let alone an irreparable harm.” On March 19 — the eve of the TRO — the Ninth Circuit denied Kalshi’s administrative stay of the remand in another unexplained one-word order. The next morning, Judge Woodbury signed the TRO.

Nevada has now expelled every prediction market from the state

The Kalshi TRO completed a five-target campaign the NGCB has executed since late 2025. The full sequence:

NGCB Chairman Mike Dreitzer pointedly noted that “unlike both Robinhood and Crypto.com before them, Kalshi has declined to reach an agreement with the Board.” FanDuel and DraftKings voluntarily surrendered their Nevada prediction market licenses in November 2025 after NGCB warnings.

“Kalshi has repeatedly stated that its operations are legal in 50 states, which is clearly not true. We want people in the state to wager safely at a licensed book.”
— Mike Dreitzer, NGCB Chairman

Arizona’s criminal charges raise the stakes from civil to existential

Three days before the Nevada TRO, Arizona AG Kris Mayes filed a 20-count criminal misdemeanor complaint against Kalshi in Maricopa County Superior Court — the first-ever criminal charges against a prediction market. The charges under A.R.S. § 13-3305 cover both unlicensed sports wagering and, critically, four counts of election wagering, which Arizona law prohibits outright regardless of licensing. Specific counts cite bets on the 2028 presidential race, the 2026 Arizona gubernatorial race, a Super Bowl prop bet on whether Elon Musk would attend, and NBA and NCAA game outcomes.

“This is a jurisdictional dispute and entirely inappropriate as a criminal prosecution. The CFTC is watching this closely and evaluating its options.”
— CFTC Chairman Michael Selig

“These charges are baseless — gamesmanship from a politician who’s up for re-election.”
— Tarek Mansour, Kalshi CEO

The impartial access argument has crumbled under scrutiny

Kalshi’s primary justification for refusing to geofence any state rests on 17 CFR § 38.151, the CFTC regulation requiring designated contract markets to provide “impartial access” to all participants. Kalshi argued that blocking Nevada users would risk its DCM registration — an “impossible choice” that supported its preemption claims.

This argument has been substantially debunked. A current CFTC official told Sportico the rule’s intent is to prevent discrimination based on economic class, not geography. Two former CFTC employees confirmed that “restrictions based on where users are located are not subject to disciplinary scrutiny.” Most damning: both Crypto.com and Polymarket geofenced Nevada without triggering any CFTC enforcement.

The CFTC’s own September 2025 staff advisory (Letter No. 25-36) actually instructed exchanges to prepare contingency plans for state enforcement — though Chairman Selig withdrew that advisory in February 2026 as part of his more aggressive defense of CFTC jurisdiction. The Maryland federal court specifically rejected the argument, noting Kalshi could simply obtain a state gaming license while maintaining impartial access to its DCM.

The CFTC’s aggressive new posture has not saved Kalshi in court

Chairman Selig, the sole sitting commissioner on the five-member body, has mounted an increasingly forceful defense of CFTC jurisdiction since taking office on December 22, 2025. In a February 16 Wall Street Journal op-ed, he called state enforcement a “power grab” and wrote: “The CFTC will no longer sit idly by while overzealous state governments undermine the agency’s exclusive jurisdiction.” The next day, he posted a video on X announcing the CFTC’s amicus brief in the Ninth Circuit — supporting Crypto.com against Nevada — that drew over 3 million views.

The amicus brief filed on February 17, 2026 — only the eighth the CFTC has filed this century — argued that event contracts are swaps under the CFTC’s exclusive jurisdiction and that state gambling laws are preempted. But the brief landed in the Crypto.com appeal, not directly in Kalshi’s, and the Ninth Circuit denied Kalshi’s emergency motion the same day the amicus was filed. Selig also withdrew the Biden-era proposed rulemaking that would have banned political event contracts and rescinded the September 2025 staff advisory, calling the prior administration’s approach a “frolic into merit regulation.”

The financial stakes explain why neither side will back down

The NGCB’s lawsuit claims sports bets constitute 90% of Kalshi’s trading volume — a figure corroborated by Sportico’s analysis of September 2025 data showing NFL contracts alone at 42% and college football at 30%. As of late December 2025, the Financial Times reported Kalshi’s cumulative sports trading volume had reached $16.8 billion, versus just $4.9 billion on all other topics combined. By February 2026, monthly volume exceeded $10 billion — a 12-fold increase in six months.

The company’s annualized revenue run rate hit $1.5 billion, up from $260 million for all of 2025, powered by a Super Bowl Sunday that generated over $1 billion in single-day volume.

Nevada’s own numbers tell a story of displacement. The state’s 2025 sports betting handle fell to roughly $8 billion, down approximately 9% from 2024, with the lowest number of Super Bowl bets in a decade. Nevada is projected to slip behind Massachusetts into eighth place nationally. Meanwhile, nationwide legal sports betting hit $165–167 billion in 2025, up 11%, generating $3.7 billion in state tax revenue. The American Gaming Association estimates prediction markets have already diverted more than $500 million in potential sports betting tax revenue — and that number is growing exponentially as Kalshi scales.

April 3 and April 16 will determine the medium-term trajectory

Two hearings in the next month will shape what comes next. On April 3, Judge Woodbury will decide whether to convert the TRO into a preliminary injunction that could last months or years. Given his written findings, conversion is widely expected. On April 16, the Ninth Circuit will hear consolidated oral arguments in the Kalshi, Robinhood, and Crypto.com appeals — the most consequential appellate proceeding yet. If the Ninth Circuit rules that sports event contracts are not federally preempted swaps, it would validate Nevada’s entire enforcement campaign and potentially embolden every other state with pending litigation.

Kalshi’s nuclear option is an emergency application to the U.S. Supreme Court. Justice Kagan, who oversees the Ninth Circuit, would receive the filing. But the TRO itself is unappealable under Nevada law, and obtaining an emergency stay from the Supreme Court against a state exercising traditional police power over gambling would be extraordinary. As of March 21, no application has been filed.

The fortress holds, for now

Nevada’s strategy of forcing prediction market disputes into state courts — where judges apply state gambling law rather than parsing the Commodity Exchange Act’s definition of a swap — has proven devastatingly effective. Every state-court TRO application has succeeded. The NGCB has expelled all five major platforms in under five months. The CFTC’s rhetorical support and amicus briefs have not translated into courtroom results for Kalshi, and the impartial access defense has been exposed as more strategic posture than genuine regulatory constraint.

The deeper question is whether this represents the beginning of a nationwide regulatory siege or a temporary state-level holding action before federal courts resolve the preemption question. The emerging circuit split — with Tennessee and New Jersey favoring Kalshi, and Nevada, Maryland, Ohio, and Massachusetts ruling against — creates classic conditions for Supreme Court review, likely within the next two years. Until then, the prediction market industry faces the reality that the most powerful gaming regulator in the country has declared its mission accomplished — and the tournament goes on without Kalshi in Nevada.

Sources

• Nevada Gaming Control Board Statement on Kalshi TRO — Nevada Gaming Control Board
• First Judicial District Court TRO Order — First Judicial District Court of Nevada
• Arizona AG Criminal Complaint Against Kalshi (20 Counts) — Arizona Attorney General’s Office
• CFTC Amicus Brief in Ninth Circuit (Feb 17, 2026) — Commodity Futures Trading Commission
• U.S. District Court, District of Nevada — Judge Gordon Ruling (Nov 2025) — United States Courts
• Ninth Circuit Orders — Administrative Stay Denials — U.S. Court of Appeals for the Ninth Circuit
• AGA Prediction Market Tax Revenue Impact Analysis — American Gaming Association