Feb 17 (GeokHub) — Nevada gaming regulators have filed a lawsuit seeking to stop prediction market operator Kalshi from offering sports-related event contracts to residents of the state.
The legal action marks a significant escalation in the broader dispute over whether state gaming authorities or federal regulators have primary oversight of prediction market platforms that allow users to place financial bets on real-world events.
Nevada’s Legal Argument
The Nevada Gaming Control Board argues that contracts tied to sporting events — including football and basketball — amount to wagering under Nevada law. As such, the state contends Kalshi must obtain proper gaming licenses and comply with strict regulatory standards.
State officials claim the company has not adhered to key gaming requirements, including age restrictions prohibiting individuals under 21 from placing wagers. Regulators also cited safeguards intended to prevent insider betting and match-fixing.
Nevada is asking a state court to issue a temporary restraining order that would block Kalshi from continuing to offer the contracts within the state.
Federal vs. State Oversight Clash
The lawsuit comes amid an intensifying jurisdictional dispute. On the same day Nevada filed its case, the Commodity Futures Trading Commission signaled support for prediction market operators in related litigation, asserting that it holds exclusive authority over such contracts under federal commodities law.
Kalshi maintains that its event contracts qualify as swaps — a type of financial derivative — placing them squarely under federal oversight rather than state gaming regulation.
Shortly after Nevada’s lawsuit was filed, the New York-based company moved to shift the case to federal court, arguing the matter hinges on whether the CFTC has sole jurisdiction.
If Nevada prevails, it would become the second state to secure a court order blocking Kalshi’s sports-related contracts. Earlier this month, a Massachusetts judge granted an injunction at the request of the state attorney general, though that order has since been temporarily paused pending appeal.
Nevada has also successfully obtained court orders against other prediction market platforms, including Coinbase and Polymarket, restricting their ability to offer similar event-based contracts in the state.
What’s at Stake
The outcome of the Nevada case could have nationwide implications for how prediction markets are regulated. At the center of the debate is whether platforms offering financial contracts tied to sports outcomes operate as regulated derivatives exchanges — or as unlicensed sports betting entities.
As courts weigh in, the case may help define the regulatory boundaries between state gaming commissions and federal commodities authorities in the rapidly evolving prediction market industry.
