Today, February 17, 2026, saw the following:

1)  The US Ninth Circuit Court of Appeals denied Kalshi’s attempt to prevent the state of Nevada from suing the sports event prediction market operator.

2)  The Nevada Gaming Control Board and the state attorney general then filed suit in state court for a temporary restraining order (“TRO”) to put Kalshi out of business, at least in the Silver State.

3)  The Trump Administration jumped in, for the first time officially taking Kalshi’s side.

What happens next?

The state court will issue the TRO, ordering Kalshi to immediately stop doing business unless it gets a state sports betting license, which it will not do.

Kalshi will remove the case to federal court.  This may happen before the state judge can issue the TRO.  It will then be up to the federal trial judge to decide whether to hear the case or remand it back to state court.  It is a little difficult to predict the judge’s decision because there are a lot of federal issues involved, but they are all defenses being raised by Kalshi, which may not be enough to make the case a “federal question.”

Not coincidentally, Michael Selig, Donald Trump’s latest appointed chairman of the federal Commodity Futures Trading Commission (“CFTC”), has come out strongly in favor of Kalshi.  “The CFTC will no longer sit idly by while overzealous state governments undermine the agency’s exclusive jurisdiction over these markets by seeking to establish statewide prohibitions on these exciting products.”  Selig’s statement does not mention that he had previously been Kalshi’s lawyer.  

Selig is not only the chairman, he is also the whole CFTC.  Trump has not bothered to appoint anyone else to the five-member Commission; why should he?  It’s not like Selig will call for a quorum.  

The Trump family has a lot of money riding on sports prediction markets continuing.  Trump’s eldest son, Donald Trump Jr., has invested in the other big operator in the field, Polymarket, while being paid to be a strategic adviser to Kalshi.

While that is going on, Kalshi will take an emergency motion to the US Supreme Court to overturn the Ninth’s Circuit decision.  Normally, this would not stand a snowball’s chance in Hell of succeeding.  But since there are definite signs of fire and brimstone in today’s legal and political landscape, it is possible the Court headed by my former Harvard Law School classmate, John Roberts, will reverse, continuing its misuse of the “shadow docket.”

The current SCOTUS has overturned lower court TROs and preliminary injunctions the vast majority of the times a lower court has found the Trump Administration was acting illegally.  The Trump Administration has filed and won more of these emergency motions in Trump’s first year than were filed in the 16 years under Obama and George W. Bush.  The Republican majority on the Court does not allow briefs or oral arguments; it often does not even state its reasons. This “shadow docket” does not create any legal precedent, because the lower court orders were only preliminary.  But it allows Trump to continue to do whatever he wants for years.

Assuming the SCOTUS denies Kalshi’s appeal, technically a writ, Nevada’s case will go forward.

Which court hears the case may decide the result.  A Nevada federal judge had ruled in favor of Kalshi last year.  Since then many courts have ruled that sports events predictions are a form of gambling, regulated by states, and not commodities trading, regulated by the federal government.  But the Nevada federal judge could avoid embarrassing himself by ruling that he cannot decide the case, because it first has to be heard by the CFTC.

One thing is certain: The next few weeks will be very interesting for the sports betting industry.  Of course, this is not necessarily good news.  As the probably apocryphal traditional Chinese curse goes: “May you live in interesting times.”