Nevada Takes Legal Action to Halt Kalshi's Predictive Market Operations in the State

Nevada's gambling regulator filed a lawsuit on Tuesday seeking to prevent predictive market operator Kalshi from offering event contracts that allow state residents to wager on sports such as football and basketball. The Nevada Gaming Control Board initiated the legal action as part of an escalating conflict over whether state gambling regulators nationwide have the authority to oversee companies like Kalshi, which enable users to make financial bets through their prediction markets.

On the same day Nevada filed its suit, the U.S. Commodity Futures Trading Commission expressed support for companies like Kalshi in a related litigation brief, asserting that the commission holds exclusive jurisdiction over prediction markets. Kalshi has spent months attempting to block Nevada regulators from pursuing legal action. However, a federal appeals court on Tuesday declined to suspend a judge's November order that lifted a prior injunction preventing Nevada authorities from taking enforcement measures.

If Nevada prevails in court, it will become the second state to secure a judicial order barring Kalshi from offering sports event contracts. Earlier, a judge in Massachusetts issued an injunction on February 5 at the request of the state’s attorney general. The ban was originally set to take effect after 30 days, but a judge in the state’s appeals court suspended it on Tuesday pending an appeal by Kalshi.

In Tuesday’s lawsuit, Nevada argued that offering sports event contracts or certain other event contracts constitutes gambling under state law, meaning Kalshi must obtain a license. The suit alleges that Kalshi has failed to comply with the state’s gambling regulations, including prohibitions on individuals under 21 placing bets and requirements that entities accepting sports wagers implement safeguards against insider betting and match-fixing by individuals such as players.

The state has previously convinced a judge to issue orders prohibiting two other prediction market operators, Coinbase and Polymarket, from offering event contracts.