In a recent court ruling, a Nevada state judge has prolonged a temporary ban on Kalshi's sports-related contracts, stating that purchasing a contract on the platform is essentially equivalent to placing a bet on a state-licensed gaming platform. The judge's decision extends the initial temporary restraining order, which was granted on March 20, by an additional two weeks to finalize the language of a preliminary injunction. This move is in response to the Nevada Gaming Control Board's request to prohibit Kalshi from offering certain prediction markets until a more comprehensive court case can be resolved. The board considers sports event contracts to be a form of wagering activity that requires licensing under local laws.
Kalshi, on the other hand, argues that its products are federally regulated designated contract markets offering swaps, a type of derivative product, and thus are not subject to state regulation. The case is part of a broader debate over the regulation of prediction market providers, with state regulators seeking to block these companies' sports-related products and the Commodity Futures Trading Commission arguing that it has the proper regulatory authority.