On Friday, a Nevada state judge prolonged a temporary ban on Kalshi's sports-related contracts, granting the Nevada Gaming Control Board's request for a preliminary injunction. The ruling, made by Judge Jason Woodbury in the First Judicial District Court, effectively prohibits Kalshi from offering certain prediction markets until a more comprehensive court case can be resolved. The initial temporary restraining order, issued on March 20, had already blocked Kalshi from providing sports, entertainment, and election-related bets. According to the judge, purchasing a contract for a baseball game on Kalshi is essentially equivalent to placing a wager on a state-regulated gaming platform.
As a result, the judge concluded that such activities constitute prohibited gaming for non-licensed entities. Kalshi's representatives did not respond to requests for comment. Mike Dreitzer, chairman of the Nevada Gaming Control Board, expressed satisfaction with the ruling, stating that the board will continue to enforce Nevada law to protect the state's gaming industry. The board considers sports event contracts to be a form of wagering activity under local laws, requiring licensing.
The decision reflects Nevada's public policy of prioritizing the regulation and protection of the gaming industry to ensure the state's economy and general welfare. State regulators across the US have been attempting to block prediction market providers, arguing that their sports-related products resemble gambling products that should be subject to state regulation. Companies like Kalshi, however, claim that they are federally regulated and offer swap contracts, a type of derivative product, making them exempt from state regulation.
The Commodity Futures Trading Commission has supported this stance, filing an amicus brief and suing several states, including Arizona, Illinois, and Connecticut, for allegedly infringing on its regulatory role. A related hearing took place in a federal court in Arizona, where Kalshi sought to block state regulators from restricting its products.
The presiding judge, Michael Liburdi, is currently considering the motion.