On Friday, a state judge in Nevada decided to extend a temporary ban on Kalshi's sports-related prediction contracts, granting the Nevada Gaming Control Board's request for a preliminary injunction. The judge, Jason Woodbury, made this decision during a hearing at the Carson City courthouse, extending the temporary restraining order he initially granted on March 20 by two weeks to finalize the injunction's details. This initial order had blocked Kalshi from offering contracts related to sports, entertainment, and elections. The judge compared buying a contract for a baseball game on Kalshi to placing a bet on a state gaming platform, deeming it 'indistinguishable' and thus a prohibited gaming activity for non-licensees.
The chairman of the Nevada Gaming Control Board, Mike Dreitzer, expressed satisfaction with the ruling, stating his commitment to enforcing Nevada law to protect the state's gaming industry. The board views 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, arguing they offer gambling products that should be regulated at the state level.
In contrast, companies like Kalshi argue they are federally regulated and offer swaps, a type of derivative product, making them exempt from state regulation. The Commodity Futures Trading Commission supports this stance, recently filing a lawsuit against Arizona, Illinois, and Connecticut, alleging these states are overstepping their authority.
The issue is also being contested in a federal court in Arizona, where Kalshi is seeking to block state regulators from interfering with its operations.