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Nevada regulators have filed a request, known as a motion to compel discovery, from prediction market Kalshi to disclose key information related to its federally approved business.
The news comes as further tightening of legal noose is focusing on Nevada versus prediction markets like Kalshi and Crypto.com (Crypto).
Kalshi under scrutiny by Nevada regulators
We reported that a Nevada judge, Andrew Gordon, recently rejected a request for an injunction by the latter company to allow it to continue offering sports betting lines.
Crypto’s legal team did not see the validity of the decision, given that Kalshi has been allowed to run almost identical products. However, Judge Gordon’s decision stated: “Crypto contracts explicitly refer to the outcome. I view the outcome as different from the occurrence.”
Now, legal specialist and gambling commentator Daniel Wallach has put together an update on Kalshi’s legal dealings in the state of Nevada, after a cease and desist was issued in March.
He posted on social media saying that Kalshi has refused to provide information or correspondence with the Commodity Futures Trading Commission (CFTC) about his business model.
NEW: Nevada files motion to compel Kalshi to make discovery, seeks CFTC correspondence and internal communications discussing financial, business or economic consequences associated with sporting event contracts; says Kalshi has refused to file internal communications. pic.twitter.com/N4lSTndLhf
-Daniel Wallach (@WALLACHLEGAL) October 9, 2025
Wallach went on to say that legal documents focused on four particular subsections, surrounding Kalshi’s “ability or inability to comply with state law.”
Kalshi’s motion to compel discovery
The eagle-eyed gambling commentator goes into detail about Kalshi’s correspondence regarding “the financial, commercial or economic consequences of the events on which his contracts are based and whether they satisfy the definition of ‘swap’.”
The second question was aimed at Kalshi’s legal gray areas and whether the company is consciously veering into illegal gambling territory.
“Documents and communications relating to Kalshi’s ability or inability to comply with state law, and the alleged challenges associated with doing so (issues that Kalshi raised in question and addressed in a sworn statement) are clearly relevant and should be produced. And to the extent certain responsive communications are privileged, they should be included in a privilege log.” – KalshiEx LLC v. Hendrick et al.
Wallach highlighted the next point the New York-based company was asked: “whether its event contracts may fall into a prohibited category, including because they relate to illegal gaming or activities.”
Finally, questions three and four intersect and surround Kalshi’s compliance with the CFTC’s “Core Principles,” asking what the company’s “basis is for certifying that its event contracts serve legitimate risk mitigation and price discovery purposes rather than purely recreational purposes.”
Kalshi, according to court documents provided by Wallach, has yet to satisfy Nevada parties seeking more clarity.
Therefore, the decision to request this information, which would provide key correspondence the company has had with the CFTC, could be an important factor in the future of prediction markets in The Silver State.
Meanwhile, Wallach has produced key information suggesting potential sanctions could be coming to Kalshi’s current business in Nevada.
Nevada seeks sanctions against Kalshi:
"Kalshi’s use of repetitive unsubstantiated objections and his continued refusal to produce requested documents on matters that the Court has already determined are properly the subject of discovery is not justified." pic.twitter.com/TQs0jH2qAV
-Daniel Wallach (@WALLACHLEGAL) October 10, 2025
“Kalshi’s use of repetitive unsubstantiated objections and his continued refusal to produce requested documents on matters that the Court has already determined are properly the subject of discovery is not justified.”
Cover image: Canva / Kalshi
The post Nevada Files Motion for Key CFTC Documents and Kalshi appeared first on ReadWrite.
