On Friday, a state judge in Nevada extended a temporary ban on sports-related contracts offered by prediction market provider Kalshi, citing that buying a contract on a baseball game through Kalshi was no different from placing a bet on a state gaming platform. The judge's decision blocked Kalshi from offering sports, entertainment, and election-related bets, deeming such activities as prohibited gaming for non-licensed entities. The Nevada Gaming Control Board considers sports event contracts as wagering activities that require licensing under local laws.
This move is part of a broader effort by state regulators to block prediction market providers across the U.S., arguing that their sports-related products constitute gambling products subject to state regulation. However, companies like Kalshi argue that they are federally regulated and offer swaps, a type of derivative product, thus not being subject to state regulators. The case reflects a conflict between state regulators and the Commodity Futures Trading Commission, which supports the stance of prediction market providers.