First blood to Kalshi
Kalshi has drawn first blood against multiple state gambling regulators after a federal judge tossed a cease-and-desist order. The action would allow the prediction market provider to continue offering sports and politics betting events in Nevada.
federal judge sided with Kalshi’s lawsuit brought last week
A federal judge sided with Kalshi’s lawsuit brought last week against the Nevada Gaming Control Board’s order. According to a Wednesday Front Office Sports report, US District Court Judge Andrew P. Gordon has issued a minute order granting “in part, Kalshi’s motion for a temporary restraining order and preliminary injunction.”
Judge Gordon also quashed the Nevada Gaming Commission’s counterclaims for an immediate temporary restraining order against Kalshi and a preliminary injunction that it halt all sports betting events markets in the state.
The federal court’s decision means that Kalshi can continue operating its polarizing markets in Nevada while the case gets litigated.
Pivotal victory
Nevada has been one of the loudest voices against prediction markets, making Kalshi’s victory in the state with long-established regulatory powers a very significant one.
Judge Gordon’s ruling will take the wind out the sails of five other states that followed Nevada’s suit. Regulators in New Jersey, Illinois, Maryland, Ohio, and Montana have also issued cease-and-desist orders to Kalshi, Robinhood, and Crypto.com.
intrudes upon the federal regulatory framework that Congress established”
Last week, Kalshi filed a lawsuit claiming Nevada’s prohibitive order “intrudes upon the federal regulatory framework that Congress established for regulating futures derivatives on designated exchanges.”
FOS cited a Kalshi spokesperson praising the federal court for blocking Nevada “from trying to prevent Kalshi from offering prediction markets.”
“We are grateful for the court’s careful attention to this matter and recognition of Kalshi’s status as a CFTC-regulated exchange. On to the next step.”
Feds vs state saga
The NGCB’s cease-and-desist order to Kalshi stated that its Contracts For Difference (CFDs) resembled sports wagers. The regulator said it had not licensed the New York firm to run a sports pool.
Kalshi’s retaliatory lawsuit focused on the argument that CFDs fall under the federal control of the Commodity Futures Trading Commission and, as such, are not beholden to state regulatory decrees.
According to FOS, the NGC “did not immediately respond to a request for comment.”
