- Nevada’s gaming regulator has filed a civil lawsuit against prediction market platform Kalshi for offering unlicensed sports wagering, a move that followed a federal appeals court ruling in the state’s favor.
- The legal battle centers on a jurisdictional conflict, with Kalshi arguing it is under exclusive federal oversight by the CFTC, while Nevada insists its sports contracts constitute illegal gambling under state law.
- In a related case, CFTC Chair Mike Selig has asserted his agency’s exclusive jurisdiction over prediction markets, filing a brief in support of crypto.com in its own lawsuit against Nevada.
The gaming regulator in Nevada swiftly filed a civil enforcement action against Kalshi on Tuesday after a federal appeals court removed a block on the state taking action according to its press release. Consequently, this marks a significant setback in Kalshi’s year-long effort to defend its sports prediction markets within the state.
Nevada’s complaint argues that Kalshi’s contracts allow users to wager on sports outcomes, which constitutes unlicensed gambling under state law. However, Kalshi countered by filing a motion to move the suit to federal court, repeating its claim of exclusive federal jurisdiction under the CFTC which its filing shows.
Meanwhile, CFTC Chair Mike Selig directly entered the fray on the same day, backing Crypto.com in a parallel legal fight. Selig stated that event contracts “are commodity derivatives and squarely within the CFTC’s regulatory remit,” and the agency would defend its exclusive jurisdiction.
This regulatory clash follows a cease-and-desist order Nevada issued to Kalshi last March, which the company previously succeeded in temporarily blocking. The CFTC’s stance, as noted by legal observers, underscores a growing conflict between state and federal authorities over prediction markets. Kalshi and other platforms now face similar lawsuits from multiple states challenging their operational model.
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