Nevada judge extends ban on Kalshi, rejects event contract defense

A Nevada judge has reportedly extended a ban preventing Kalshi from offering event-based contracts in the state, ruling that the products constitute unlicensed gambling under state law.

Judge Jason Woodbury said at a hearing in Carson City on Friday that he will grant a preliminary injunction requested by the Nevada Gaming Control Board, barring the company from allowing residents to trade on outcomes such as sports, elections and entertainment events without a gaming license, according to Reuters.

The decision extends a temporary restraining order issued on March 20, which will remain in effect through April 17 while the court finalizes longer-term restrictions.

Kalshi, based in New York, has argued that its contracts are financial derivatives, specifically “swaps,” that fall under the exclusive oversight of the Commodity Futures Trading Commission (CFTC).

Related: Appeals court denies Kalshi request to block Nevada enforcement action

Judge says Kalshi contracts mirror sports betting

Woodbury rejected Kalshi’s argument, claiming that there is a direct comparison between traditional sports betting and Kalshi’s platform, according to Reuters. He said that placing a wager through a licensed sportsbook and buying a contract tied to a game outcome are functionally the same, per the report.

“No matter how you slice it, that conduct is indistinguishable,” the judge reportedly said, adding that such activity qualifies as gaming under Nevada law and cannot be offered without proper licensing.

Kalshi notional volume. Source: Kalshi

The case marks the first time a state has secured a court-enforced ban currently in effect against the company.

Last month, Utah lawmakers also passed a bill targeting Kalshi and Polymarket that classifies proposition-style bets on in-game events as gambling, aiming to block such offerings in the state.

Related: Kalshi CEO fires back against Arizona criminal charges as ‘total overstep’

CFTC vows court fight over prediction market oversight

The CFTC has asserted authority over prediction markets, with Chairman Michael Selig warning that the agency is prepared to defend its jurisdiction in court against any challenges from states or other regulators.

Speaking at an industry conference last month, Selig said prediction markets can act as “truth machines,” arguing that when participants put money behind their views, these markets can produce more transparent and reliable signals about future events than traditional opinion polling.

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