A Nevada state judge has extended a temporary ban on Kalshi‘s sports-related prediction market contracts and indicated he will grant a preliminary injunction against the company while a broader legal dispute plays out. Judge Jason Woodbury of the First Judicial District Court made the announcement at a hearing held Friday at the Carson City courthouse. He extended the original temporary restraining order by two weeks to allow time to finalize the injunction’s language.
Judge Woodbury first issued the temporary restraining order on March 20, blocking Kalshi from offering sports, entertainment, and election-related contracts in Nevada. At Friday’s hearing, he said that purchasing a contract on a baseball game through Kalshi was “indistinguishable” from placing a bet on a state-licensed gaming platform. “So I find based on the arguments that have been presented that it is a gaming activity that is prohibited for any non-licensee to engage in,” he said.
The preliminary injunction was requested by the Nevada Gaming Control Board, which has been pushing to restrict Kalshi’s operations in the state. Neither Kalshi nor the Nevada Gaming Control Board responded to requests for comment. The case reflects a growing conflict between state gaming regulators and prediction market companies operating across the United States.
State regulators in multiple jurisdictions have moved to block prediction market providers, arguing that sports-related products offered by these companies amount to gambling and should fall under state oversight. Kalshi and similar firms counter that they operate as federally regulated designated contract markets offering swaps, a category of derivative product, and are therefore not subject to state-level regulation.
The Commodity Futures Trading Commission, led by Chairman Mike Selig, has sided with the prediction market companies. The agency filed an amicus brief in a federal appeals court case earlier this year and, on Thursday, joined the Department of Justice in suing Arizona, Illinois, and Connecticut, arguing that the CFTC holds proper regulatory authority and that the states are encroaching on its jurisdiction.
Friday’s Nevada hearing coincided with a separate federal court proceeding in Arizona, where Kalshi sought to prevent state regulators from blocking its products. Arizona Attorney General Kris Mayes had previously filed an information alleging criminal charges against the company. District Judge Michael Liburdi heard arguments in that case and is currently considering the motion, according to court records.
The dual hearings on the same day underscore the intensifying legal confrontation between prediction market providers and state authorities. The outcome of these cases could have significant implications for how prediction markets are regulated nationwide, with federal and state regulators staking out competing claims over jurisdiction.
Originally reported by CoinDesk.
