Controversial financial exchange platform Kalshi will be forced to at least temporarily abandon offering sports contracts in Nevada after a federal judge ruled in favor of Nevada casino regulators who had sought to block the prediction market.

In a 29-page ruling issued Monday, U.S. District Judge Andrew Gordon sided with the Nevada Gaming Control Board and dissolved his 7-month-old preliminary injunction that allowed Kalshi to continue operations while it fights the state’s cease and desist order.

Gordon wrote that Kalshi’s interpretation “would require all sports betting across the country to come within the jurisdiction of the Commodity Futures Trading Commission (CFTC)” rather than state and tribal gaming regulators.

“That interpretation upsets decades of federalism regarding gaming regulation, is contrary to Congress’ intent … and cannot be sustained,” Gordon wrote.

Increasingly popular prediction markets allow people to wager on the outcomes of events ranging from entertainment, politics, pop culture, financial markets and even the weather in the form of “yes” and “no” contracts. Businesses, including Kalshi, say they’re sufficiently regulated by a federal agency that oversees commodity trading — major casinos and gaming regulators in Nevada and across the country maintain that the businesses are essentially using a loophole to offer sports betting.

In April, the judge sided with Kalshi and ruled in the company’s favor for a preliminary injunction, after the Control Board ordered the company to cease operating those kinds of contracts in March. The ruling allowed the company to continue offering sports-related event contracts in Nevada.

However, in October, Gordon denied a preliminary injunction request by prediction market Crypto.com, after the Control Board filed a similar cease and desist order that would have allowed the company to continue offering those contracts in Nevada.

“In Crypto, I ruled that event contracts that turn on the outcomes of sporting events are not swaps and thus do not fall within the CFTC’s exclusive jurisdiction,” the judge wrote.

Control Board Chairman Mike Dreitzer said Tuesday the agency was drafting a notice on the judge’s ruling that would be published online either late Tuesday or Wednesday. It’s expected the board will tell gaming licensees not to have any dealings with Kalshi or other prediction markets.

In an email, Sara Slane, Kalshi’s head of corporate development, said the company disagreed with the judge’s ruling.

“As other courts have recognized, Kalshi is a regulated, nationwide exchange for real-world events, and it is subject to exclusive federal jurisdiction,” Slane wrote. “It's very different from what state-regulated sportsbooks and casinos offer their customers. We are evaluating the decision and anticipate making an appeal to the Ninth Circuit.”

Nevada is one of nearly two dozen states and tribal gaming authorities that have filed federal lawsuits seeking to block Kalshi and other prediction markets from offering sports wagering contracts (the term companies use to describe the business) in their jurisdictions. Sports betting is legal and regulated in 39 states and Washington, D.C.

Separately on Tuesday, Gordon ruled against stock trading platform Robinhood, which had sued the state and sought an injunction that would have allowed its users to use Kalshi’s platform for sports contracts. 

Following appearances by the CEO’s of DraftKings and FanDuel at last month’s Global Gaming Expo in Las Vegas, the nation’s two largest sports betting operators announced plans to launch prediction market businesses. Both companies gave up interests in Nevada because of the state’s opposition.