On Friday, Nevada judge Jason Woodbury moved to block prediction market platform Kalshi from offering event-based contracts in the state, siding with regulators who argue the products amount to illegal gambling.
Nevada Judge Extends Ban On Kalshi
At a hearing in Carson City, Woodbury said he would grant a preliminary injunction requested by the Nevada Gaming Control Board, preventing the company from operating without a proper gaming license, Reuters reported.
Court Rejects Financial Product Argument
Kalshi, based in New York, has argued that its contracts — which allow users to trade on outcomes like sports games and elections — are financial instruments regulated by the Commodity Futures Trading Commission.
However, the judge dismissed that distinction, noting that purchasing such contracts mirrors traditional sports betting.
He highlighted that the activity is “indistinguishable” from placing wagers through licensed operators, making it subject to Nevada’s strict gaming laws.
Temporary Order Extended Amid Ongoing Legal Fight
The ruling extends a temporary restraining order issued in March, which bars Kalshi from offering contracts tied to sports, elections and entertainment through at least mid-April while terms of a longer-term injunction are finalized.
Nevada currently stands as the only state to secure a court-enforced ban against Kalshi, placing it at the center of a broader legal dispute over whether prediction markets fall under state gambling laws or federal financial regulation.
Kalshi did not immediately respond to Benzinga‘s request for comment.
Nationwide Clash Over Prediction Market Regulation
The case is part of a growing conflict between states and federal authorities.
The CFTC has challenged multiple states’ attempts to regulate such platforms, while states like Arizona have taken aggressive action, including criminal charges.
Earlier this week, it was reported that Kalshi, in a November trademark filing, requested that the U.S. Patent and Trademark Office categorize its product within the gambling industry.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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