The US state of Nevada has sued Kalshi after the prediction markets company lost its court challenge to stop the state's regulator from taking motion against its sports prediction markets.
The U.S. Court of Appeals for the Ninth Circuit on Tuesday rejected Kalshi's try to block the Nevada gaming regulator from taking motion on his sports event contracts, lifting a block that might have prevented the regulator from pursuing a civil lawsuit against the corporate.
Following the choice, the Nevada Gaming Control Board immediately filed a civil enforcement motion in state court against Kalshi, which it said sought to stop the corporate from “offering unlicensed wagering in violation of Nevada law.”
Kalshi immediately filed a motion to have the lawsuit heard in federal court, repeating his longstanding argument that the lawsuit was “subject to the exclusive federal jurisdiction” of the Commodity Futures Trading Commission.
The appeals court decision and subsequent lawsuit are a blow to Kalshi in his nearly year-long battle against Nevada to take care of his sports contracts within the state. The company and other prediction markets are facing several similar lawsuits from other states.
The company sued the state in March of last yr after receiving a cease-and-desist order that might shut down all sports-related markets within the state. In April, a federal court backed Kalshi's try to temporarily block Nevada from taking motion while the court proceeded.
Source: Daniel Wallach
Kalshi didn’t immediately reply to a request for comment.
Nevada says Kalshi violated state law
In its latest lawsuit, the Nevada Gaming Control Board reiterated its previous assertion that Kalshi's sports event contracts meet the necessities for a license under state law because they “allow users to bet on the outcomes of sporting events.”
Although Kalshi makes betting, sports betting and other gambling activities accessible within the state of Nevada, it is just not licensed in Nevada and doesn’t comply with Nevada gambling law,” the regulator argued.
In his motion to the federal court, Kalshi argued that such a claim means the court must adopt “a narrow interpretation” of the federal commodity trading laws that it claims are regulated by the CFTC.
CFTC Chairman Claims Jurisdiction Over Prediction Markets
Earlier Tuesday, CFTC Chairman Mike Selig said his agency had filed an amicus transient in support of Crypto.com in the same lawsuit the crypto exchange filed against Nevada.
Crypto.com sued Nevada regulators in June after also receiving a cease-and-desist letter. It also appealed to the Ninth Circuit in November after rejecting a federal court request to dam the state from taking motion.
The CFTC argued in its transient to the Ninth Circuit that “states cannot invade the CFTC's exclusive jurisdiction over CFTC-regulated markets for certain contracts by recharacterizing swap trading on DCMs as illegal gambling.”
Selig said event contracts “are commodity derivatives and fall squarely inside the regulatory purview of the CFTC,” and the agency will “defend its exclusive jurisdiction over commodity derivatives.”
The CFTC's move got here after Trump Media and Technology Group said in October that it desired to bring prediction markets to its flagship social media platform Truth Social through a partnership with Crypto.com.
Donald Trump Jr., the US President's son, has also been an advisor to Kalshi since January 2025. He also served as an advisor to rival Polymarket after investing in the corporate in August.
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