A Nevada court has extended its ban on prediction market platform Kalshi, preventing it from offering event-based contracts in the state without a gaming license. Judge Jason Woodbury ruled the contracts are akin to gambling, rejecting Kalshi’s argument they are federally regulated financial swaps. This marks a first legal victory for a state against the platform as scrutiny expands, with Utah taking similar action and the CFTC defending its regulatory role.
A state court has ruled to maintain a ban on Kalshi operating in Nevada, requiring the platform to obtain a gaming license to offer its event contracts. The ruling extends a temporary restraining order first placed on March 20.
The Nevada Gaming Control Board petitioned the court, arguing that Kalshi‘s services constitute gambling rather than financial trading. Judge Jason Woodbury issued the temporary injunction, barring Nevada residents from trading the contracts.
Kalshi argued its contracts were financial instruments qualified as “swaps” under CFTC oversight. The judge dismissed this, stating purchasing a contract on a game outcome was no different from a sportsbook bet.
Woodbury declared, “No matter how you look at it, it’s the same thing.” This maintains the service ban throughout the litigation, as detailed in a report by Reuters.
This is the first time a state has successfully imposed an active court ban against Kalshi. Utah has also acted, passing a law in February categorizing such proposition wagers as gambling.
The CFTC maintains its position on overseeing prediction markets and other derivatives. Chairman Michael Selig recently stated the agency is prepared to fight legal battles to preserve its regulatory mandate.
