On Friday, a state judge in Nevada decided to extend a temporary ban on Kalshi, a prediction market provider, offering sports-related contracts in the state. The decision was made by Judge Jason Woodbury in the First Judicial District Court, who also agreed to the Nevada Gaming Control Board's request for a preliminary injunction against Kalshi. This injunction will prevent Kalshi from offering certain prediction markets until a broader case with the state gaming regulator is resolved. The original temporary restraining order, issued on March 20, blocked Kalshi from offering bets on sports, entertainment, and elections.
According to the judge, buying a contract for a baseball game on Kalshi is no different from placing a bet on a state gaming platform. The judge stated that this activity is a form of gaming that is prohibited for non-licensed entities. Kalshi's representatives did not respond to requests for comment.
Mike Dreitzer, the chairman of the Nevada Gaming Control Board, expressed his satisfaction with the ruling and reiterated his commitment to enforcing Nevada law to protect the state's gaming industry. The board considers contracts for sports events to be a form of wagering that requires licensing under local laws.
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. However, companies like Kalshi argue that they are federally regulated and offer swaps, a type of derivative product, which exempts them from state regulation.
The Commodity Futures Trading Commission has taken a stance in support of these companies, filing an amicus brief and suing several states, including Arizona, Illinois, and Connecticut, for allegedly infringing on its regulatory role.