On Friday, a Nevada state judge extended a temporary ban on Kalshi, a prediction market provider, offering sports-related contracts in the state. The decision, made by Judge Jason Woodbury in the First Judicial District Court, also granted the Nevada Gaming Control Board's request for a preliminary injunction against Kalshi.
This injunction will prohibit Kalshi from offering certain prediction markets until a broader court case with the state gaming regulator is resolved. The original temporary restraining order, issued on March 20, blocked Kalshi from offering sports, entertainment, and election-related bets. According to Judge Woodbury, purchasing a contract for a baseball game on Kalshi is virtually indistinguishable from placing a bet on a state gaming platform.
The judge stated that this activity constitutes prohibited gaming for non-licensed entities. Kalshi spokespersons did not respond to requests for comment. Mike Dreitzer, chairman of the Nevada Gaming Control Board, expressed satisfaction with the ruling and reiterated the board's commitment to enforcing Nevada law to protect the state's gaming industry.
The board considers sports event contracts to be wagering activities under local laws, requiring licensing. The ruling is part of a larger effort by state regulators to block prediction market providers, arguing that their sports-related products are essentially gambling products that should be regulated at the state level. In contrast, Kalshi and other prediction market providers claim that they are federally regulated designated contract markets offering swaps, a type of derivative product, and therefore are not subject to state regulation.
The Commodity Futures Trading Commission has taken a stance in support of these companies, filing an amicus brief in an appeals court case and suing Arizona, Illinois, and Connecticut, arguing that it is the proper regulator and alleging that the states are overstepping their authority. A hearing on a related matter took place in a federal court in Arizona, where Kalshi sought to block state regulators from restricting its products. Arizona Attorney General Kris Mayes had previously filed an information alleging criminal charges against Kalshi.