In a recent ruling, a Nevada state judge extended a temporary ban on Kalshi, a prediction market provider, from offering sports-related contracts in the state. The decision, made by Judge Jason Woodbury in the First Judicial District Court, came after the Nevada Gaming Control Board requested a preliminary injunction against Kalshi. The judge initially granted a temporary restraining order on March 20, which has now been extended by two weeks to allow for the language of the injunction to be finalized. According to the judge, purchasing a contract on a baseball game through Kalshi is comparable to placing a bet on a state gaming platform, and therefore constitutes a prohibited gaming activity for non-licensed entities.
The Nevada Gaming Control Board considers sports event contracts to be a form of wagering activity that requires licensing under local laws. This move is part of a broader effort by state regulators to block prediction market providers, arguing that their sports-related products are essentially gambling products that should be regulated at the state level. However, companies like Kalshi argue that they are federally regulated and offer swaps, a type of derivative product, and are therefore not subject to state regulation. 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.