Nevada regulators have submitted a request, known as a motion to compel discovery, from predictions market Kalshi to disclose key information relating to its federally approved business.
The news comes as a wider tightening of legal knots is coming into focus in Nevada against predictions markets like Kalshi and Crypto.com (Crypto).
Kalshi under scrutiny from Nevada regulators
We reported that a Nevada Judge, Andrew Gordon, recently refused a request for an injunction by the latter company to allow it to continue to offer sporting betting lines.
Crypto’s legal team did not see the validity in the decision, given that Kalshi has been allowed to run near identical products. However, Judge Gordon’s decision stated, “Crypto’s contracts explicitly refer to outcome. I see outcome different from occurrence.”
Now, legal specialist and gambling commentator Daniel Wallach has produced an update on Kalshi’s legal dealings in the state of Nevada, after it was issued a cease-and-desist in March.
He posted to social media, saying that Kalshi has refused to produce any information or correspondence with the Commodity Futures Trading Commission (CFTC) on their business model.
NEW: Nevada files motion to compel discovery from Kalshi, seeks CFTC correspondence and internal communications discussing financial, commercial, or economic consequences associated with sports event contracts; says Kalshi has refused to produce any internal communications. pic.twitter.com/N4lSTndLhf
— Daniel Wallach (@WALLACHLEGAL) October 9, 2025
Wallach continued that the legal documents focused on four particular subsections, which surround Kalshi’s “ability or inability to comply with state law.”
Kalshi’s motion to compel discovery
The eagle-eyed gambling commentator goes into detail around Kalshi’s correspondence surrounding “financial, commercial, or economic consequences of the events on which their contracts are based and whether they satisfy the definition of a ‘swap’.”
The second question was aimed at Kalshi’s legal grey areas and whether the company knowingly strays into illegal betting territory.
“Documents and communications concerning Kalshi’s ability or inability to comply with state law, and the supposed challenges associated with doing so—subjects Kalshi put at issue and addressed in a sworn declaration—are plainly relevant and should be produced. And to the extent certain responsive communications are privileged, they should be included on a privilege log.” – KalshiEx LLC vs Hendrick et al
Wallach highlighted the next point asked of the New York-based company, “whether its event contracts may fall within a prohibited category, including because they relate to gaming or unlawful activity.”
Finally, questions three and four intersect and surround Kalshi’s compliance with the “Core Principles” of the CFTC, asking what the company’s “bases for certifying that its event contracts serve legitimate risk mitigation and price discovery purposes rather than pure recreational purposes.”
Kalshi, according to the court documents provided by Wallach, has not yet satisfied the Nevada parties that are seeking more clarity.
So the decision to request this information, which would provide the key correspondence the company has had with the CFTC, could be a big factor in the future of prediction markets in The Silver State.
In the meantime, Wallach has produced key information suggesting that possible sanctions on Kalshi’s current Nevada business could be forthcoming.
Nevada seeks sanctions against Kalshi:
“Kalshi’s use of unsupported boilerplate objections and continued refusal to produce requested documents concerning issues that the Court has already determined are properly the subject of discovery is unjustified.” pic.twitter.com/TQs0jH2qAV
— Daniel Wallach (@WALLACHLEGAL) October 10, 2025
“Kalshi’s use of unsupported boilerplate objections and continued refusal to produce requested documents concerning issues that the Court has already determined are properly the subject of discovery is unjustified.”
Featured image: Canva / Kalshi
