Nevada Takes Legal Action Against Kalshi Over Sports Event Contracts
Nevada Challenges Kalshi’s Sports Event Contract Operations
Kalshi, a New York-based company aiming to operate sports event contracts across the country, is facing legal opposition from Nevada. The Nevada Gaming Control Board recently filed a lawsuit to prevent Kalshi from offering contracts related to professional and college sports within the state.
Dispute Over Whether Kalshi’s Contracts Constitute Gambling
Nevada regulators maintain that Kalshi’s sports-related contracts fall under the definition of gambling according to state law. They argue that Kalshi must secure a Nevada gaming license and adhere to stringent state regulations. Officials also highlight concerns about the platform’s lack of essential consumer protections, including age verification and measures to prevent insider trading or match-fixing.
This legal action persists despite recent declarations from the Commodity Futures Trading Commission (CFTC) affirming its exclusive authority over prediction markets. Kalshi claims that its contracts are swaps subject to federal regulation rather than state gaming laws. Nonetheless, this federal jurisdiction claim remains contentious.
Kalshi previously attempted to prevent Nevada regulators from pursuing enforcement, but a federal appeals court refused to halt a ruling that allows state authorities to move forward. In response, Kalshi has pushed to have the case moved to federal court, citing federal preemption over state regulations.
Growing State-Level Resistance to Prediction Markets
If Nevada obtains a temporary injunction, it would be the second state, following Massachusetts, to successfully block Kalshi’s sports event contracts through legal means. Earlier this year, a Massachusetts court temporarily prohibited Kalshi from offering these contracts, a decision that has encouraged other states to challenge prediction markets.
Nevada emphasizes its commitment to consumer protection and regulatory fairness. The state has previously restricted platforms like Coinbase and Polymarket, concerned that allowing federally regulated exchanges to coexist with licensed sportsbooks could undermine the integrity of state-regulated gambling frameworks.
Meanwhile, Kalshi insists that Congress has granted the CFTC exclusive oversight of all derivatives markets, including event contracts, despite their resemblance to traditional betting products. Until legal authorities resolve the jurisdictional conflict, Kalshi’s efforts to expand into the sports market are expected to face increasing opposition from states, tribal entities, and other regulated sports betting stakeholders.
