Kalshi routed detractors in an early win in Nevada, when its sports event contracts were deemed as a viable product that may continue to operate despite regulatory grumblings. That was back in April when the platform appeared to be poised to define the phrasing around prediction markets.
Kalshi asks for a stay on the recent ruling that would stop its platform in Nevada
Framing the exact legal language of what prediction markets have been seen by most attorneys as the correct strategy, but this is now in jeopardy. A 29-page ruling issued on Monday by US District Judge Andrew Gordon has overturned the previous ruling that favored Kalshi to continue offering its sports event contracts.
This time around, however, the judge has backed the Nevada Gaming Control Board, which has insisted time and again that prediction markets ought to go.
DraftKings and FanDuel, the two largest sports betting companies in the United States, withdrew from Nevada, and the American Gaming Association, over their own ambitions to launch prediction markets and understanding the difficulty of pushing against the Silver State’s regulator, opting for the exit instead.
Judge Gordon has argued against Kalshi’s definition of sports gambling and event contracts because, according to him, this specific framing would "require all sports betting across the country to come within the jurisdiction of the CFTC."
Kalshi was operating in the state as of Tuesday, with Nevada Gaming Control Board Chairman Mike Drietzer raising alarm over the lack of compliance from Kalshi. Kalshi has swiftly responded that the company is asking Judge Gordon for a stay while the company appeals his decision.
Kalshi disagrees with the ruling, argues it ought to be regulated under the CFTC
In an email to The Nevada Independent, detailing the company’s response, Kalshi Head of Corporate Development Sara Slane expressed disagreement with the judge’s ruling:
"As other courts have recognized, Kalshi is a regulated, nationwide exchange for real-world events, and it is subject to exclusive federal jurisdiction. It's very different from what state-regulated sportsbooks and casinos offer their customers. We are evaluating the decision and anticipate making an appeal to the Ninth Circuit."
However, this is not the only challenge Kalshi is facing, with dozens of tribal bodies, federal and state regulators taking aim at sports event contracts. While DraftKings and FanDuel are both venturing into the sector, they have understood that running both products in parallel may not be feasible in independent states.
