On Friday, a Nevada state judge extended a temporary ban on Kalshi's sports-related prediction market contracts, granting the Nevada Gaming Control Board's request for a preliminary injunction. The decision, made by Judge Jason Woodbury in the First Judicial District Court, prevents Kalshi from offering certain prediction markets until a broader case with the state gaming regulator is resolved. The initial temporary restraining order, issued on March 20, blocked Kalshi from providing sports, entertainment, and election-related bets. According to the judge, purchasing a contract for a baseball game on Kalshi is comparable to placing a bet on a state gaming platform, thus deeming it a prohibited gaming activity for non-licensed entities.
The Nevada Gaming Control Board considers sports event contracts as wagering activities that require licensing under local laws. The board's chairman, Mike Dreitzer, expressed satisfaction with the ruling, stating that the board will continue to enforce Nevada law to protect the state's gaming industry. This move is part of a larger effort by state regulators to block prediction market providers, arguing that their sports-related products resemble gambling products that should be regulated at the state level.
In contrast, Kalshi and other prediction market providers argue that they offer federally regulated designated contract markets, providing swaps as a type of derivative product, and are therefore not subject to state regulation. The Commodity Futures Trading Commission has supported these companies, filing an amicus brief in an appeals court case and suing Arizona, Illinois, and Connecticut, claiming that it is the proper regulator and that the states are overstepping their authority. A separate hearing took place in a federal court in Arizona, where Kalshi sought to block state regulators from restricting its products, and Arizona Attorney General Kris Mayes had previously filed allegations of criminal charges against Kalshi.
The court is currently considering the motion.