The restraining order came one day after the Ninth Circuit Court of Appeals denied Kalshi's request for an administrative stay. Gaming attorney Dan Wallach told CoinDesk the ruling would push Kalshi entirely out of Nevada pending a preliminary injunction hearing, adding that Nevada's application seeks to block all of Kalshi's event contracts in the state, not only sports-related ones.

At the center of the dispute is a question with no clear answer in U.S. law yet: who actually regulates prediction markets? Kalshi argues that its products are event contracts governed exclusively by the federal Commodity Futures Trading Commission (CFTC) under the Commodity Exchange Act, and that federal authority preempts state regulators. Nevada disagrees. State officials classify Kalshi's offerings as unlicensed sports betting under Nevada gaming law. Courts have come down on both sides. Nevada and Massachusetts have ruled in favor of state authority, while New Jersey, Connecticut, and Tennessee have issued rulings favoring Kalshi.

"This is a jurisdictional dispute and entirely inappropriate as a criminal prosecution," CFTC Chair Michael Selig said in response to Arizona's decision earlier this week to file 20 criminal counts against the company for alleged unlicensed gambling. Arizona Attorney General Kris Mayes framed the matter differently. "Rather than work within the legal frameworks that states like Arizona have established, Kalshi is running to federal court to try to avoid accountability," she said. Kalshi called the Arizona charges "seriously flawed and meritless."

The legal situation has escalated sharply in a short period. Nevada's gaming regulator issued a cease-and-desist order in March 2025. A Massachusetts court imposed a preliminary injunction in January 2026. Arizona became the first state to pursue criminal charges on March 17. By the time the Nevada TRO landed on March 20, more than 11 states had issued cease-and-desist orders, 11 states had introduced prediction market legislation in 2026, and over 20 civil lawsuits were pending nationally. In its Ninth Circuit filing on March 13, Kalshi warned of an "untenable risk" of conflicting federal and state court decisions creating an unworkable compliance environment.

The financial stakes involved help explain why both sides are fighting hard. Kalshi processed roughly $10 billion in trading volume in February 2026 alone, approximately 12 times its volume from six months earlier, according to CoinDesk. Sports contracts account for over 90 percent of the platform's activity and close to 89 percent of its revenue, with college basketball wagers alone reaching an estimated $1.9 billion in February. Annualized revenue is running at $1.5 billion. States estimate they are losing more than $600 million in sports betting tax revenue to prediction market operators they consider unlicensed. On the same day the Nevada court issued the TRO, Bloomberg reported that Kalshi closed a funding round of more than $1 billion at a $22 billion valuation, led by Coatue Management. That figure is double the company's $11 billion valuation from December 2025.

What This Means Outside the United States

For users and developers in South Asia, the Kalshi battles carry a pointed lesson: federal regulation does not guarantee frictionless access. Kalshi announced expansion into more than 140 countries in October 2025, explicitly naming India and China in that push. Indian regulators have moved in the opposite direction. The Promotion and Regulation of Online Gaming Act, passed in 2025, classifies prediction markets as illegal online money games, and the Ministry of Electronics and Information Technology has directed internet service providers to block platforms including Polymarket. The Act had not yet been formally notified and was therefore not yet in force as of early 2026, and it faces a pending Supreme Court constitutional challenge, meaning India's regulatory posture is considerably less settled than it may appear to outside observers. Kalshi's Indian user base exists largely through VPN workarounds. The U.S. situation underscores that even a CFTC-designated exchange can face sudden access cutoffs, a risk Indian developers building on prediction market infrastructure should model into their planning.

In Africa, the picture is different but equally uncertain. Prediction market volumes globally grew roughly 130-fold between early 2024 and the end of 2025, reaching $44 billion. African regulators have no coordinated framework in place. Liberia is an outlier: its National Lottery Authority has formally authorized prediction markets, creating a potential entry point for licensed operators. But in markets like Ghana, Kenya, Nigeria, and South Africa, the absence of clear rules creates serious consumer protection concerns that go well beyond regulatory inconvenience. In Ghana, research shows that 84 percent of young gamblers exhibit signs of problematic or moderate gambling behavior, 68.8 percent report clinical anxiety, and 43.6 percent suffer from depression. Youth gambling participation rates across Ghana, Kenya, and South Africa run between 71 and 83 percent, and Nigeria is among the countries actively considering a regulatory framework. The Nevada case is a practical illustration of what happens when gambling commissions and capital markets regulators fail to coordinate early enough.

The CFTC is expected to complete new rulemaking on event contracts in 2026, pursuing a four-part agenda that includes a joint SEC-CFTC interpretation framework. That agenda represents a reversal of the more cautious approach taken during the Biden administration and reflects the current commission's more permissive stance toward prediction markets. Whether CFTC rulemaking can preempt state authority remains precisely the contested legal question at the heart of all these cases, and analysts caution against treating the rulemaking process as a guaranteed resolution to the federal-state conflict. Until a clearer framework is in place, Kalshi and its users face a fragmented legal map with no reliable path to compliance across all jurisdictions.