Federal judge denies Kalshi stay bid to pause Nevada gaming enforcement case
A federal judge in Nevada has refused to put a legal fight between state regulators and prediction-market operator Kalshi on hold, clearing the way for the dispute to return to state court.
U.S. District Judge Miranda M. Du ruled Thursday (March 12) that Kalshi does not qualify for an automatic pause of the proceedings and also failed to meet the legal threshold required for a discretionary stay. Because of that decision, the lawsuit brought by Nevada regulators will move back to the First Judicial District Court in Carson City.
Nevada filed the case through the Nevada Gaming Control Board, arguing that Kalshi’s event-based trading markets amount to unlicensed gambling under state law. The company shifted the case to federal court earlier in the dispute, but the judge previously concluded the federal court did not have subject matter jurisdiction and ordered the matter returned to state court.
Kalshi appealed that remand order and asked the federal court for an emergency stay so the case would remain in federal court while the appeal plays out.
Judge says Kalshi stay appeal doesn’t justify halting transfer back to Nevada court
In the latest ruling, Du rejected Kalshi’s argument that Federal Rule of Civil Procedure 62(a) automatically stops the remand order from taking effect. That rule typically creates a short pause before judgments are enforced, but the court said the earlier decision did not qualify.
“The Court has not entered judgment on the merits of this case,” the order states, explaining that the earlier ruling dealt only with jurisdiction and simply returned the dispute to state court.
The judge also evaluated whether the court should grant a discretionary stay using the four-factor test set by the U.S. Supreme Court in Nken v. Holder. That framework weighs the chances of success on appeal, whether the party would suffer irreparable harm without a stay, potential harm to others, and the broader public interest.
Du said the most important factors, likelihood of success and irreparable harm, both worked against Kalshi.
According to the ruling, the company is unlikely to prevail on appeal because it did not properly invoke the federal officer removal statute when it initially transferred the case to federal court. Kalshi later attempted to amend its filing to add that argument, but the judge struck the change, saying the court had regained jurisdiction only to resolve the stay request.
The court also rejected the company’s claim that it would cause irreversible damage if the case proceeded in state court while the appeal continues.
“Litigating in state court is not a harm, let alone an irreparable harm,” the order states.
Du added that delaying the case could hurt Nevada regulators and undermine the public interest. She pointed to earlier findings suggesting Kalshi’s markets may pose risks to the state’s regulated gaming industry.
The ruling comes as Kalshi faces mounting legal pressure in multiple states. Nevada regulators have also sought to lift an earlier injunction that temporarily allowed the company’s markets to operate, while courts in other jurisdictions, including Ohio, have recently declined to grant similar relief sought by the company.
“The Board argues that the stay would harm it, noting that Chief Judge Gordon already concluded that Kalshi’s operations in impose ‘substantial irreparable harms to the Board, the State of Nevada, the gaming industry in this state, and the public interest.’”
With the stay request denied, Du ordered the federal court clerk to send the case back to Nevada state court and close the federal proceeding. The enforcement fight between Kalshi and Nevada regulators is now expected to continue at the state level.
Featured image: Kalshi / Canva
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