Kalshi’s Legal Struggle in Nevada and Recent Partial Stay Victory
Kalshi’s Legal Conflict in Nevada Intensifies
Kalshi, a leading name in prediction markets, has recently found itself in legal difficulties within Nevada as part of a wider regulatory crackdown on event contract providers. Despite these challenges, the company has managed to secure a partial stay in its ongoing lawsuit against Nevada’s gaming authorities.
The Ongoing Dispute Between Kalshi and the Nevada Gaming Control Board
The conflict began months ago when the Nevada Gaming Control Board (NGCB) issued an order for Kalshi to cease operations in the state. The NGCB contended that Kalshi’s event contracts closely resembled sports betting, thereby infringing upon Nevada’s gaming regulations.
While some regulators criticize prediction markets as unregulated forms of sports betting, Kalshi maintains that its services fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC), which authorizes its operations across most states.
Kalshi has publicly stated that it will withdraw from specific markets only if mandated by the CFTC.
Initially, there appeared to be a favorable outlook for Kalshi in Nevada until Judge Andrew P. Gordon overturned a preliminary injunction, asserting that Kalshi must comply with Nevada’s gaming laws despite the company’s contrary stance.
Following this ruling, Kalshi appealed to the Ninth Circuit Court and requested a pause in the case. The court has now granted a partial stay of proceedings.
Details of the Partial Stay Granted to Kalshi
Judge Gordon approved the partial stay to give the Ninth Circuit time to review Kalshi’s appeal of the November decision. However, the judge denied a stay on discovery, meaning both Kalshi and the NGCB must continue exchanging documents and evidence during the appeals process.
Consequently, deadlines for key motions and the preparation of the joint pretrial order are postponed until the appeal concludes.
The continuation of discovery suggests that the case may return to district court regardless of the appeal’s outcome, with the judge noting that the upcoming ruling is likely to offer guidance but may not resolve the dispute entirely.
