Nevada gaming regulators took a big step on Tuesday. They sued prediction market operator Kalshi to stop it from offering sports betting contracts to Nevada residents. The state argues that Kalshi's contracts on football and basketball games count as illegal wagering without a license. Kalshi disagrees and says the Commodity Futures Trading Commission (CFTC) has full control over these types of markets. The lawsuit came soon after the CFTC supported companies like Kalshi in related court fights, claiming they alone regulate prediction markets. Kalshi had tried for months to block Nevada’s case, but a federal appeals court let the state go ahead by lifting an earlier injunction. If Nevada wins, it would follow Massachusetts, which also blocked Kalshi from sports betting contracts in February. However, a Massachusetts court paused its order as Kalshi appeals. Nevada says Kalshi broke state laws designed to prevent underage gambling and insider betting. It also pushed for a court block against Kalshi, similar to bans on Coinbase and Polymarket, two other prediction market firms. Kalshi quickly asked to move the case to federal court, arguing that only the CFTC can decide legal matters here. This ongoing battle highlights the tense fight between state and federal regulators over the new world of prediction market betting.