On Friday, a Nevada state judge extended a temporary ban on Kalshi, a prediction market provider, offering sports-related contracts in the state. Judge Jason Woodbury, presiding over the case in the First Judicial District Court, decided to grant the Nevada Gaming Control Board's request for a preliminary injunction against Kalshi. This decision prevents Kalshi from offering certain prediction markets until the state's gaming regulator can resolve a broader court case. The temporary restraining order, initially granted on March 20, has been extended by two weeks to finalize the language of the injunction.
According to the judge, purchasing a contract for a baseball game on Kalshi's platform is virtually indistinguishable from placing a bet on a state-licensed gaming platform. The judge concluded that such activities constitute prohibited gaming for unlicensed 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 and vowed to continue enforcing Nevada law to protect the state's gaming industry. The board considers contracts related to sports events to be a form of wagering activity under local laws, requiring proper licensing.
The state's public policy emphasizes the importance of a regulated gaming industry to the economy and general welfare of its inhabitants. Regulators across the United States have been working to block prediction market providers, arguing that their sports-related products resemble gambling products that should be regulated at the state level.
In contrast, companies like Kalshi argue that they are federally regulated and offer swap contracts, which are a type of derivative product, exempting them 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 overstepping their regulatory authority.
A related hearing took place in a federal court in Arizona, where Kalshi sought to block state regulators from interfering with its products. The court is currently considering the motion.