A Nevada judge has upheld a ban on Kalshi's event-based contracts, determining that these offerings qualify as unlicensed gambling under state regulations. This decision, made by Judge Jason Woodbury during a hearing in Carson City, follows a preliminary injunction sought by the Nevada Gaming Control Board. The ruling extends a temporary restraining order that was initially placed on March 20 and will continue until April 17 while the court works on establishing more permanent restrictions.
Kalshi, which operates out of New York, contends that its contracts are financial derivatives known as “swaps,” which should be regulated solely by the Commodity Futures Trading Commission (CFTC). However, Judge Woodbury dismissed this argument, asserting that the nature of Kalshi’s contracts is comparable to traditional sports betting. He indicated that the act of wagering through a licensed sportsbook and purchasing a contract based on a game’s outcome are essentially the same, thus falling under Nevada's gaming laws.
This case sets a precedent as it is the first instance of a state successfully enforcing a ban on Kalshi through the courts. The ongoing scrutiny includes similar legislative efforts, such as a recent bill passed in Utah aimed at prohibiting proposition-style betting on in-game events.