The risk of a Nevada ban on transactions between Kalshi and Polymarket is rising.

A federal judge has remanded the Nevada case against Kalshi and Blockratize, the parent company of Polymarket, back to state court, ruling that the claims are primarily based on state law and that the Commodity Exchange Act does not completely exclude the state law claims. This means that Nevada regulators can continue to seek a temporary injunction in state court, increasing the risk that Kalshi and Polymarket will be restricted from offering event contract trading in the state. Reports indicate that Kalshi is evaluating an emergency appeal option, while Polymarket has applied for a stay of execution. Previously, Nevada had alleged that the relevant event contracts required a license under state law and filed a lawsuit. (Decrypt)