In a recent ruling, a Nevada state judge has prolonged a temporary ban on Kalshi, a prediction market provider, from offering sports-related contracts within the state. The decision, made 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 barring the company from providing certain prediction markets until a more comprehensive court case can be resolved.
This extension of the temporary restraining order, initially imposed on March 20, will be in effect for two weeks to allow for the refinement of the injunction's language. The original order had blocked Kalshi from offering bets related to sports, entertainment, and elections. According to the judge, purchasing a contract for a baseball game via Kalshi is essentially indistinguishable from placing a wager on a state-regulated gaming platform.
Consequently, he deemed such activities as prohibited gaming for non-licensed entities. Kalshi's representatives did not respond to requests for comments.
In a statement, Mike Dreitzer, chairman of the Nevada Gaming Control Board, expressed satisfaction with the ruling, pledging to continue enforcing state law to protect the gaming industry in Nevada. The board views sports event contracts as wagering activities that fall under local laws and thus require licensing.
The ruling is part of a broader effort by state regulators to block prediction market providers, arguing that their sports-related products are, in essence, gambling products that should be regulated at the state level. In contrast, companies like Kalshi argue that they are federally regulated and offer swaps, a type of derivative product, placing them outside the purview of state regulators. The Commodity Futures Trading Commission has taken a stance in support of these companies, filing an amicus brief and suing several states, including Arizona, Illinois, and Connecticut, for allegedly infringing on its regulatory role. On the same day as the Nevada hearing, a federal court in Arizona held another hearing related to Kalshi's operations in the state, with the company seeking to block state regulators from interfering with its products.
Arizona Attorney General Kris Mayes had previously filed allegations of criminal charges against Kalshi. The court is currently considering the motion.