A Nevada judge has temporarily barred prediction market operator Kalshi from doing business in the state, finding Nevada regulators are likely to prevail in a dispute over whether the company’s event contracts violate state gambling laws.
Carson City District Court Judge Jason Woodbury granted a 14-day temporary restraining order on Friday, acting on a motion from the Nevada Gaming Control Board to halt Kalshi’s operations in Nevada.
“Prediction markets, to the extent they facilitate unlicensed gambling, are illegal in Nevada, and we have a statutory duty to protect the public,” Nevada Gaming Control Board Chair Mike Dreitzer said in a statement to Reuters.
Kalshi did not immediately respond to requests for comment.
The court action followed a federal appeals court’s denial of Kalshi’s emergency request to stay a federal court proceeding, a decision that allowed Nevada regulators to move forward.
In his order, Judge Woodbury prohibited Kalshi from offering sports, election and entertainment-related event contracts in Nevada. He said the early record in the case treats those contracts as a “sports pool” under Nevada law, which requires licensing Kalshi does not have.
Nevada sued Kalshi last month, contending the company must be licensed by the state to offer sports event contracts. Kalshi has argued its contracts fall under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC), which has supported certain prediction markets facing state legal challenges.
“The question of federal preemption in this regard is nuanced and rapidly evolving,” Judge Woodbury wrote, rejecting Kalshi’s preemption argument and saying current legal authority leans against federal preemption here.
A hearing on a motion for a preliminary injunction is set for April 3.
Kalshi is involved in litigation with multiple states that allege it operates without required state licenses and has filed its own suits in some jurisdictions. Earlier this year, a Massachusetts judge barred Kalshi from offering sports event contracts; that order was later stayed after Kalshi appealed. Arizona recently filed criminal charges accusing Kalshi of running an illegal gambling operation, a move Kalshi CEO Tarek Mansour called a “total overstep.”
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