On Friday, 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, also granted the Nevada Gaming Control Board's request for a preliminary injunction against Kalshi, effectively barring the company from offering certain prediction markets until a broader court case can be resolved.
The temporary restraining order, initially granted on March 20, has been extended by two weeks to allow for the refinement of the injunction's language. The original order had blocked Kalshi from offering sports, entertainment, and election-related bets, with the judge deeming the purchase of a contract on a baseball game via Kalshi as indistinguishable from placing a bet on a state gaming platform. The judge emphasized 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, stating his commitment to enforcing Nevada law to protect the state's gaming industry. The board considers sports event contracts as wagering activities under local laws, necessitating licensing.
The ruling 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. In contrast, companies like Kalshi argue they are federally regulated and offer swaps, a type of derivative product, thus not subject to state regulation.
The Commodity Futures Trading Commission supports this stance, recently filing an amicus brief and suing several states, including Arizona, Illinois, and Connecticut, alongside the Department of Justice, to assert its 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, and another case is pending consideration by District Judge Michael Liburdi.