Nevada’s effort to block the prediction market platform Kalshi is moving through multiple courts, and that could have major ramifications for the brewing battle over sports betting.
A judge on Tuesday denied the company’s request to block the state from taking civil action against it. Nevada regulators claim that Kalshi, through its prediction market contracts, is offering people a way to illegally bet on sports. Kalshi argues it’s merely a financial exchange.
The case, which on Thursday was moved to a federal court, is one of many actions carried out by states as prediction markets explode in popularity. Those companies, most notably Kalshi and its main competitor, Polymarket, have fought back with the support of the Trump administration.
At issue is a question that could determine the future of prediction markets nationwide: Are sites like Kalshi and Polymarket federally regulated financial exchanges — or unregulated sportsbooks operating outside of state gambling laws?
“It’s our view that this is sports betting, plain and simple,” Mike Dreitzer, chairman of the state’s Gaming Control Board, told NBC News on Thursday. “Money is risk-based upon the outcome of sporting events and that is sports betting (not made under the umbrella state regulations) and that’s illegal under Nevada law.”
He declined to comment on the ongoing litigation.
A Kalshi spokesperson declined to comment on Thursday.
The Commodity Futures Trading Commission (CFTC), which oversees the platforms,maintains that they are not gambling.
“CFTC-registered exchanges have faced an onslaught of lawsuits seeking to limit Americans’ access to event contracts and undermine the CFTC’s sole regulatory jurisdiction over prediction markets,” CFTC chairman Michael Selig said in a“friend-of-the-court” brieffiled earlier this week — a clear rebuke against Nevada’s enforcement efforts. “This power grab ignores the law and decades of precedent.”
Even over this last week, the current state of play highlights those legal complexities.
Source: Drudge Report
