Nevada court extends injunction: Kalshi sports prediction market deemed as "quasi-gambling"

BlockBeats message: On April 4, a court in Nevada, USA ruled that the sports contracts offered by prediction market platform Kalshi are “not materially different” from gambling, and decided to extend a temporary injunction related to its relevant business.

Judge Jason Woodbury of the First Judicial District said he would approve the request of the Nevada Gaming Control Board and issue a preliminary injunction barring Kalshi from offering some of its prediction market products in the state during the case proceedings. The temporary restraining order issued on March 20 was also extended by two weeks.

The court said that buying sports event contracts on the Kalshi platform is essentially the same as placing a bet on a licensed wagering platform, and therefore constitutes unlicensed gambling activity.

Currently, regulators in multiple U.S. states are stepping up restrictions on prediction market platforms, arguing that their sports-related products should be brought under state-level gambling oversight. Kalshi, meanwhile, contends that, as a derivatives market regulated by the Commodity Futures Trading Commission (CFTC), it provides contract trading and therefore should not be subject to each state’s gambling laws.

At the same time, the CFTC has, together with the Department of Justice, sued states including Arizona, Illinois, and Connecticut, arguing that the federal government has regulatory authority over the relevant business. The regulatory dispute is still brewing, and is expected to have a significant impact on the development of the prediction market industry.