Kalshi, a growing prediction market platform, has been ordered to stop offering sports-related contracts in Nevada after a new ruling from U.S. District Judge Andrew Gordon.
The decision reverses a preliminary injunction the judge granted earlier this year that had allowed the company to continue operating during its legal fight with state gaming regulators.
What the Ruling Says
In a 29-page order issued Monday, Judge Gordon sided with the Nevada Gaming Control Board and dissolved his earlier injunction.
He wrote that Kalshi’s arguments would bring all sports betting under the federal Commodity Futures Trading Commission, instead of state and tribal gaming agencies that traditionally regulate gambling.
He wrote that such an interpretation “upsets decades of federalism regarding gaming regulation” and “cannot be sustained.”
The decision affects Kalshi’s contracts tied to sports outcomes.
Nevada regulators say these products meet the state’s definition of sports wagering.
Kalshi argues they are financial contracts covered by federal law.
Background of the Case
Prediction markets allow customers to buy “yes” or “no” contracts on the outcome of real-world events.
These can include sports, elections, entertainment and financial indicators.
Kalshi operates under approval from the CFTC and says it is a national exchange for event contracts.
The Nevada Gaming Control Board issued a cease and desist order in March, saying Kalshi was offering sports wagers without a Nevada license.
Kalshi challenged that action and won a preliminary injunction in April that let it continue operating during the lawsuit.
But in October, Judge Gordon rejected a similar request from another platform, Crypto.com, that wanted to offer sports-related contracts in Nevada.
In that ruling, he said event contracts based on sports outcomes “are not swaps” under federal law.
He referenced that earlier decision in Monday’s order.
Nevada’s Position
After the ruling, the Control Board posted a notice saying Kalshi was still operating in Nevada despite the judge’s order.
Chairman Mike Dreitzer wrote that the board would “vigorously oppose” any request from Kalshi to delay enforcement.
Kalshi has said it plans to ask the judge for a stay while it appeals to the Ninth Circuit.
Kalshi’s Response
In a statement to The Nevada Independent, Sara Slane, Kalshi’s head of corporate development, said the company disagreed with the decision.
She said Kalshi is a regulated exchange under federal law and “very different from what state-regulated sportsbooks and casinos offer their customers.”
She said the company is evaluating next steps and expects to appeal.
Broader Legal Activity
Nevada is one of nearly two dozen states and tribal gaming authorities challenging prediction markets that offer sports contracts.
Regulators in those states say the platforms are offering wagers that fall under state jurisdiction. Sports betting is legal and regulated in 39 states and Washington, D.C.
The court also ruled Tuesday against stock trading platform Robinhood in a related lawsuit.
Robinhood had asked for an injunction that would allow its users to access Kalshi’s sports contracts in Nevada.
The Control Board said Robinhood has agreed to stop offering new sports event contracts in the state while legal proceedings continue.
Industry Impact
The ruling comes as several major sports betting companies explore prediction market products of their own.
At last month’s Global Gaming Expo in Las Vegas, the CEOs of DraftKings and FanDuel discussed plans to enter the event-contract space.
Both companies have avoided offering these products in Nevada because of the state’s regulatory position.
The legal challenges are expected to continue as Kalshi and others seek clarity on how federal and state laws apply to event contracts tied to sports outcomes.
The opinions expressed by contributors are their own and do not necessarily represent the views of Nevada News & Views. Digital technology was used in the research, writing, and production of this article. Please verify information and consult additional sources as needed.
