- The Ninth Circuit Court of Appeals denied Kalshi‘s emergency request for a stay on Tuesday, removing a key legal shield.
- Nevada regulators are now free to file a civil enforcement action, which could quickly lead to a temporary restraining order against the platform.
- Kalshi may pursue an emergency application to the U.S. Supreme Court’s shadow docket as a final attempt to block state enforcement.
A federal appeals court dealt a sharp procedural blow to prediction market platform Kalshi on Tuesday, denying its emergency request to pause enforcement actions from Nevada regulators. This decision allows state authorities to move immediately to potentially shut down the platform’s activities within Nevada. According to posts by attorney Daniel Wallach, Nevada can now file a civil enforcement action in state court without delay.
Consequently, a temporary restraining order forcing Kalshi to halt operations in the state is expected within days. The company has declined to comment on the recent developments. The core legal conflict tests whether Kalshi‘s event contracts are federally regulated commodities or unlawful state gambling.
Kalshi asserts federal law preempts state action due to its Commodity Futures Trading Commission oversight. However, Nevada officials maintain jurisdiction over products offered to their residents. Meanwhile, Kalshi‘s last resort may be an emergency application to the U.S. Supreme Court.
The Court’s shadow docket could grant a short-term administrative stay to prevent irreparable harm. This intervention is discretionary and not guaranteed. The Ninth Circuit’s denial does not resolve the underlying legal debate but significantly increases near-term pressure on the platform.
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