A Nevada court has moved to keep Kalshi out of the state’s event-contract market while the legal fight continues. 

The ruling came after the Nevada Gaming Control Board asked the court to block the company from offering contracts tied to sports, elections, and entertainment outcomes.

The case adds to a wider debate over whether prediction market contracts fall under federal derivatives law or state gambling rules. Kalshi has said its products are financial contracts, while Nevada regulators have argued that the offerings match gambling activity under state law.

Judge Jason Woodbury said he would grant a preliminary injunction against Kalshi at a hearing in Carson City. According to Reuters, the order prevents the company from allowing Nevada residents to trade event contracts without a gaming license.

The move extends a temporary restraining order issued on March 20. That order will stay in effect through April 17 while the court completes the next steps in the case.

Kalshi had argued that its contracts are “swaps” and fall under the oversight of the Commodity Futures Trading Commission. The company has maintained that federal law gives the CFTC authority over these products.

The judge did not accept that position. Reuters reported that Woodbury said buying a contract tied to a game result is the same as placing a wager through a sportsbook. He said, “No matter how you slice it, that conduct is indistinguishable.”

State regulators score early court win

The ruling marks the first time a state has secured a court-enforced ban that is currently active against Kalshi. That gives Nevada an early legal win as more states question prediction markets tied to sports and similar events.

Utah has also moved against the sector. Lawmakers there passed a bill last month that classifies proposition-style bets on in-game events as gambling and seeks to block such products from platforms including Kalshi and Polymarket.

The dispute also comes as the CFTC continues to defend its role in prediction markets. CFTC Chairman Michael Selig said last month that the agency is ready to fight in court to protect its jurisdiction from states and other regulators.

Selig also described prediction markets as “truth machines” during an industry conference. He said markets where users risk money on outcomes can offer a clearer signal about future events than opinion polls, setting up a sharper clash between federal oversight claims and state gaming laws.

If the closing bell has long been a business model, then 24/7 trading is an attempt to break it. As the NYSE, Nasdaq, CME and Cboe race to introduce round-the-clock trading, the question is who stands to gain and who could lose.

The answer is quite simple, Mati Greenspan, CEO and founder of Quantum Economics, told CoinDesk: “The biggest losers in 24/7 stock trading won’t be traders: they’ll benefit massively. It’ll be the middlemen who’ve long made money when traders can’t trade.”

Greenspan, also a market analyst, alleged that when markets reopen after what he called a big event, “a handful of firms decide the first tradable price. Oftentimes, they will explicitly use a price that triggers stop losses for their clients, closing them out at a loss and making a profit for the broker who is essentially trading against the client.”

When Greenspan was asked whether brokers coordinate around pricing during market closures, he was blunt in his claim: “Yes, manipulation outright.”

“They basically get to control prices, often with hours to strategize,” he said. “Often hunting stops losses. When big news happens on weekends, the house tends to take liberties with pricing at the opening bell.”

His comments come as several major U.S. exchanges are looking to offer around-the-clock trading services. The NYSE said it is seeking SEC approval for 24/7 trading. Nasdaq announced similar plans in December. CME plans to roll out 24-hour crypto futures in 2026, pending approval, and Cboe recently expanded U.S. index options to 24/5 trading.

‘Plausible deniability’

While Greenspan’s comments could be seen as accusatory, it’s not hard to see why such practices could be prominent in the after-hours market. When the usual trading hours come to a close, at 4 p.m. ET, the thin liquidity can make prices easier to influence.

“After the 4 p.m. closing bell, you simply don’t have the same liquidity,” said Joe Dente, a floor broker at the New York Stock Exchange. “People have gone home and the liquidity is not there, so you’re going to see larger spreads.”

Wider spreads and thinner order books, he said, create an environment where price movements can be exaggerated compared with the regular session.

Academic research also supports the view that extended trading sessions are structurally different from core market hours. A widely cited joint UC Berkeley–University of Rochester study found that after-hours price discovery is “much less efficient,” citing lower volume and thinner liquidity that limit the speed at which information is incorporated into prices.

When asked whether manipulation already occurs during those periods, Dente said it is “possible,” but he also pointed out that “the event of 24-hour trading is going to leave things open to manipulation,” referring to conditions already seen in after-hours markets

Greenspan, meanwhile, noted that these alleged manipulation practices are “not exactly above board, so they [brokers who might be taking part in such actions] tend to maintain plausible deniability.”

This is where the line between actual manipulation and proof that such practises occur starts to blur.

A widely cited SSRN study on opening price manipulation shows how brokers can influence prices during the pre-open auction by submitting and canceling large orders, temporarily pushing stocks away from their fundamental value before broader liquidity returns.

The research found that such manipulation can create distorted opening prices that are later corrected once the full market begins trading, leaving investors who bought at the inflated price with losses. Because these distortions occur before normal trading volume returns, the resulting price moves can appear indistinguishable from ordinary market volatility.

Still another broker, familiar with overnight trading practices and who asked not to be named because they were not authorized to speak publicly, said thin overnight liquidity can occasionally make it easier for coordinated strategies to influence prices in less widely traded stocks.

And this is not just anecdotal evidence.

In late 2025, the SEC settled charges over a multi-year spoofing scheme involving deceptive orders used to move prices in thinly traded securities. Regulators also fined Velox Clearing $1.3 million for failing to detect “layering” and “spoofing” in volatile stocks.

Meanwhile, the U.S. Financial Industry Regulatory Authority (FINRA), in its 2026 Annual Regulatory Oversight Report, cited firms for “failing to maintain reasonably designed supervisory systems and controls, including with respect to the identification and reporting of potentially manipulative activity conducted in after-hours trading.”

A win for retail?

Whether it’s hard to point out how widespread these accusations are, one thing is for sure: if trading goes 24/7, traders will be the ultimate winners, particularly retail traders.

In today’s electronic markets, traders who respond fastest to market news have a structural advantage.

“There’s always an edge for whoever has the fastest computers and the best program writers,” said Dente, noting that algorithms can react to news and orders “in a nanosecond.” For individual investors, he added, keeping up with that speed is difficult. “How does the human person keep up with that?”

And reacting to these events becomes even harder for smaller investors when the market is closed, leaving those retail or smaller traders at a massive disadvantage.

Pranav Ramesh, head of quantitative research for options at Nasdaq and co-founder of Leadpoet, said thin markets can amplify those risks.

“Broker coordination may often show up as industry-wide alignment around routing and execution practices, especially where a large share of retail flow ends up with a small number of wholesalers,” he said. “Outside regular hours, scrutiny can be harder because the market is thinner and there are fewer straightforward reference points for investors to benchmark execution quality,” Ramesh said in his personal capacity.

Sources familiar with broker routing and liquidity practices told CoinDesk that price-setting power in thin sessions is real, particularly when major news breaks while markets are closed. According to those sources, coordination around routing, spreads and execution practices during extended gaps has historically been easier precisely because retail traders cannot participate.

This is precisely what around-the-clock trading will solve for traders, according to Greenspan, who said 24/7 markets would blunt fintech firms’ advantage by removing the weekend vacuum entirely.

The recent Middle East conflict has been a perfect example of how this can open up more trading opportunities when markets remain closed. Decentralized exchange, Hyperliquid, which trades on blockchain 24/7, has seen growing interest from traders betting on traditional financial assets, including oil and gold, during the weekend, when traditional exchanges are closed.

It has become so popular that weekly derivatives trading volume on the platform topped $50 billion, while it generated $1.6 million in revenue over 24 hours, outpacing the entire Bitcoin blockchain’s revenue. The platform has also recently added an S&P 500 perpetual contract.

Needless to say, major exchanges will also likely benefit from trading fees if they open for 24/7 trading.

Whether round-the-clock trading ultimately weakens brokers’ influence on price setting remains to be seen. What is clear is that exchanges and investors stand to gain from markets that never close.

“Traders can react in real time without being at the mercy of the middlemen — the brokers,” said Greenspan.

Read more: Bitcoin’s weekend selloff may be over with CME’s 24/7 crypto trading move

A Nevada judge has reportedly extended a ban preventing Kalshi from offering event-based contracts in the state, ruling that the products constitute unlicensed gambling under state law.

Judge Jason Woodbury said at a hearing in Carson City on Friday that he will grant a preliminary injunction requested by the Nevada Gaming Control Board, barring the company from allowing residents to trade on outcomes such as sports, elections and entertainment events without a gaming license, according to Reuters.

The decision extends a temporary restraining order issued on March 20, which will remain in effect through April 17 while the court finalizes longer-term restrictions.

Kalshi, based in New York, has argued that its contracts are financial derivatives, specifically “swaps,” that fall under the exclusive oversight of the Commodity Futures Trading Commission (CFTC).

Related: Appeals court denies Kalshi request to block Nevada enforcement action

Judge says Kalshi contracts mirror sports betting

Woodbury rejected Kalshi’s argument, claiming that there is a direct comparison between traditional sports betting and Kalshi’s platform, according to Reuters. He said that placing a wager through a licensed sportsbook and buying a contract tied to a game outcome are functionally the same, per the report.

“No matter how you slice it, that conduct is indistinguishable,” the judge reportedly said, adding that such activity qualifies as gaming under Nevada law and cannot be offered without proper licensing.

The case marks the first time a state has secured a court-enforced ban currently in effect against the company.

Last month, Utah lawmakers also passed a bill targeting Kalshi and Polymarket that classifies proposition-style bets on in-game events as gambling, aiming to block such offerings in the state.

Related: Kalshi CEO fires back against Arizona criminal charges as ‘total overstep’

CFTC vows court fight over prediction market oversight

The CFTC has asserted authority over prediction markets, with Chairman Michael Selig warning that the agency is prepared to defend its jurisdiction in court against any challenges from states or other regulators.

Speaking at an industry conference last month, Selig said prediction markets can act as “truth machines,” arguing that when participants put money behind their views, these markets can produce more transparent and reliable signals about future events than traditional opinion polling.

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