On Friday, a Nevada state judge prolonged a temporary ban on Kalshi, a prediction market provider, from offering sports-related contracts in the state. The ruling, issued by Judge Jason Woodbury in the First Judicial District Court, also granted the Nevada Gaming Control Board's request for a preliminary injunction against Kalshi, effectively blocking the company from offering certain prediction markets until a broader court case can be resolved. The judge initially issued a temporary restraining order on March 20, which has now been extended by two weeks to finalize the language of the injunction.
The original order had already blocked Kalshi from offering sports, entertainment, and election-related bets. According to the judge, purchasing a contract for a baseball game on Kalshi is no different from placing a bet on a state-licensed gaming platform. As a result, the judge concluded that such activities constitute prohibited gaming for non-licensed entities.
Kalshi spokespersons did not respond to requests for comment. Mike Dreitzer, chairman of the Nevada Gaming Control Board, expressed satisfaction with the ruling and pledged to continue enforcing state laws to protect the gaming industry. The board considers sports event contracts to be a form of wagering that requires licensing under local laws.
The decision reflects Nevada's public policy of closely regulating the gaming industry to safeguard public health, safety, and welfare. State regulators across the US have been taking steps to block prediction market providers, arguing that their sports-related products are essentially gambling products that should be subject to state regulation. However, companies like Kalshi claim that they are federally regulated and offer swaps, a type of derivative product, which exempts them from state oversight. The Commodity Futures Trading Commission has backed this stance, filing an amicus brief in an appeals court case and suing several states, including Arizona, Illinois, and Connecticut, for allegedly overstepping their authority.
A related hearing took place in a federal court in Arizona, where Kalshi sought to block state regulators from interfering with its operations. Arizona Attorney General Kris Mayes had previously filed charges against Kalshi, and the court is currently considering the motion.