Nevada Court Temporarily Bars Kalshi

A Nevada judge has temporarily barred prediction market Kalshi from offering event contracts for sports, election and entertainment in the state, Bloomberg reported Friday (March 20).

The temporary restraining order, which can last for up to two weeks, came in a case in which the Nevada Gaming Control Board contends that prediction markets that facilitate unlicensed gambling are illegal in the state, according to the report.

Nevada regulators have also secured temporary restraining orders against Polymarket, Robinhood, Crypto.com and Coinbase, the report said.

When the Nevada Gaming Control Board filed a civil enforcement action against Coinbase in February, Mike Dreitzer, chairman of the regulator, said in a press release: “The Board takes seriously its obligation to operate a thriving gaming industry and to protect Nevada citizens. The action taken yesterday reinforces this obligation.”

Ryan VanGrack, vice president of litigation at Coinbase, said at the time that the board’s move is a “state power grab” prohibited by Congress.

“Nevada’s lawsuit, filed without meaningful notice or opportunity for Coinbase to engage, is the type of state power grab that Congress explicitly prohibited when granting the CFTC [Commodity Futures Trading Commission] exclusive jurisdiction over event contracts,” VanGrack said.

The CFTC is battling with state gaming authorities over the regulation of prediction markets.

The agency filed a friend-of-the-court brief in support of Crypto.com in its case against the Nevada Gaming Control Board in the Ninth Circuit Court of Appeals.

CFTC Chairman Michael Selig wrote at the time that the CFTC has exclusive jurisdiction over prediction markets and will not let state governments undermine that jurisdiction.

“Under the plain language of the Commodity Exchange Act, event contracts are ‘swaps,’” Selig wrote. “They are derivative instruments that allow two parties to speculate on future market conditions without owning the underlying asset. In the wake of the 2008 financial crisis, Congress expressly granted the CFTC comprehensive authority over any such contract based on a commodity.”

In another, separate case, Kalshi is facing criminal charges in a lawsuit filed Tuesday (March 17) by the Arizona attorney general. In that case, Arizona alleges that Kalshi violated state laws that prohibit operating an unlicensed wagering business and that ban betting on elections.