For a prediction market that has been besieged by state cease-and-desist orders over the last month, Kalshi notched a slight victory this week.
On April 8, U.S. District Court Judge Andrew Gordon granted Kalshi a preliminary injunction against the Nevada Gaming Control Board (NGCB). The injunction prevents the NGCB from imposing the order against Kalshi, contending that the site illegally offered sports wagering across the state.
As with other prediction markets, Kalshi is awaiting a closely-watched roundtable from the U.S. Commodity Futures Trading Commission (CFTC) for clarity on whether sports event contracts mimic sports gambling.
In a 24-page filing, Nevada Attorney General Aaron Ford argued that Kalshi failed to demonstrate that Congress, through the Commodity Exchange Act (CEA), intended to preempt Nevada state gaming laws under the Supremacy Clause of the Constitution. However, Gordon ruled that Nevada’s regulatory agencies have no jurisdiction to decide that Kalshi’s conduct violates state law given that the activities are still legal under federal law.
The injunction enjoins the Nevada Gaming Control Board and the Nevada Gaming Commission from pursuing civil or criminal prosecutions against KalshiEX LLC for offering event-based contracts on a CFTC-designated market.
“We are grateful for the court’s careful attention to this matter and recognition of Kalshi’s status as a CFTC-regulated exchange,” Kalshi wrote in a statement.
Also this week, Kalshi appointed former American Gaming Association executive Sara Slane as head of corporate development. Slane, a former interim CEO of the AGA, testified at a Congressional hearing on sports betting in 2018. Kalshi handled more than $400 million in event contracts on college basketball during March Madness.
