Key Highlights
- A Nevada court has extended the ban on Kalshi, ruling it requires a gaming license to offer event-based contracts.
- The judge concluded that the contracts are indistinguishable from traditional betting.
The Nevada court has extended the ban on a New York-based platform, Kalshi, which restricts the company from offering event-based contracts in the state without a gaming license, with the court ruling that the products effectively mirror traditional betting.
According to a Reuters report, at the hearing in Carson City on Friday, Judge Jason Woodbury said he would issue a preliminary injunction requested by the Nevada Gaming Control Board. The order extends a previous temporary restraining order and bars Kalshi from offering contracts associated with sports, elections, and entertainment events in Nevada unless it gets a state gaming license.
Judge unconvinced by Kalshi’s statement
Kalshi has stated that its event contracts should be categorized as financial instruments, particularly “swaps” falling under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC).
However, Judge Woodbury rejected the argument and drew a direct comparison between Kalshi’s offerings and traditional sports betting. He added that “no matter how you slice it, that conduct is indistinguishable.”
The ruling supports the view that such activity constitutes unlicensed gaming under Nevada law. Kalshi has not officially responded to the decision.
The court’s restraining order
Earlier, the court issued a 14-day restraining order, which was issued on March 20, giving the court time to decide on a longer-term injunction. During this duration, Kalshi wasn’t allowed to offer its services within the state.
As of now, Nevada is the only state to put a court-enforced ban against Kalshi, placing it at the core of a broader jurisdictional dispute.
Criminal action in Arizona
Last month, Arizona Attorney General Kris Mayes initiated criminal proceedings against Kalshi for allegedly operating an illegal gambling business and allowing users to place bets on elections.
A total of 20 counts were filed in Maricopa County Superior Court, in which Arizona prosecutors claimed that Kalshi accepted wagers from residents on professional and college sports games, individual player performance, and others.
In response, Kalshi described the charges as “paper-thin” and maintained that its platform differs from traditional sportsbooks or casinos.
Broader context
The case highlights an ongoing conflict between state regulators and federal authorities over who has the power to oversee prediction markets. Platforms such as Kalshi permit users to trade contracts based on the outcomes of real-world events, obscuring boundaries between financial derivatives and gambling.
For now, Kalshi’s operations in Nevada are halted as the court continues to weigh whether the contract comes under the category of financial markets or gaming regulation.
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