Kalshi made its latest push to keep the fracas over the legality of its sports offerings in federal court Tuesday, mere hours after the prediction market was ordered to litigate the dispute in state court.

U.S. District Judge Miranda Du punted the case to state court Monday, spurning Kalshi's argument that its "sports events contracts" should be treated as swaps or derivatives that are regulated under the federal Commodity Exchange Act rather than state-level gaming laws.

The judge did not believe that the Commodity Exchange Act could fully preempt the Nevada Gaming Control Board's interests, writing that "Congress did not intend for the CEA to completely displace the board's state law claims" and shipping the case back to state court, where the board initially filed it last month.

In a brief Tuesday motion, Kalshi told the court that pausing the case would "prevent any jurisdictional confusion" regarding its own case against Nevada, which is the wellspring for the company's showdown with state watchdogs.

Representatives for Kalshi and Nevada did not immediately respond to requests for comment Tuesday.

The brawl began last year when Nevada's regulators sent a cease-and-desist letter to Kalshi, explaining that its sports offerings, which allow customers to trade on the outcomes of games or individual athletes' performances, flouted state gaming rules.

Kalshi then sued Nevada, briefly winning an injunction to keep its sports offerings live before a federal judge dissolved it. The company then appealed that decision to the Ninth Circuit, where it briefly held an agreement with the state to hold off any civil enforcement proceedings. That agreement soon fizzled, prompting Nevada to sue Kalshi in state court.

Kalshi immediately removed the case to federal court, reiterating its position that the sports trades it offers are the purview of the federal government, a position later backed by U.S. Commodity Futures Trading Commission Chairman Michael Selig in a related case involving Crypto.com.

But Judge Du did not see the dispute as a federal matter, noting that a full preemption of state law is rare, and marshaling the dispute back to state court.

The Nevada Gaming Control Board is represented by Jessica Whelan, John S. Michela and Sabrena Clinton of the state attorney general's office.

Kalshi is represented by Andrew L. Porter, Grant R. Mainland, Joshua B. Sterling, Matthew Laroche, Neal K. Katyal, Nicole Valente and William Havemann of Milbank LLP and Dennis L. Kennedy and Paul C. Williams of Bailey Kennedy LLP.

The case is State of Nevada v. KalshiEX LLC, case number 2:26-cv-00406, in the U.S. District Court for the District of Nevada.