In a significant legal defeat for the prediction market industry, Kalshi has been forced to halt its offerings for sports, elections, and entertainment events in Nevada.
The Nevada Gaming Control Board (NGCB) successfully obtained a 14-day temporary restraining order (TRO), marking the first time a US state has successfully forced a prediction market to geofence its core products. The regulator argues that Kalshi is conducting unlicensed gambling in clear violation of state statutes.
The Regulator’s Stand on Unlicensed Wagering
The NGCB has maintained that Kalshi’s contracts are effectively sports bets and fall under the state’s definition of wagering. Chairman Mike Dreitzer was particularly vocal about Kalshi’s legal claims:
“Kalshi has repeatedly stated that its operations are legal in 50 states, which is clearly not true. Prediction markets, to the extent they facilitate unlicensed gambling, are illegal in Nevada, and we have a statutory duty to protect the public. We want people in the state to wager safely at a licensed book”.
Kalshi Urges Political Action from Nevada Users
Following the court order, Kalshi sent an emergency email to its Nevada-based users, confirming the restriction but expressing strong disagreement with the court’s stance. The company stated:
“We’ll cut to the chase. Due to a temporary court order, our markets related to sports, entertainment, and elections are being restricted in Nevada… we’re following [the restrictions]. We’re confident in our legal position, and we’ll continue to fight for your right to trade the same products that are available in 49 other states”.
While users can sell existing positions, they are barred from opening new ones in the restricted categories. A hearing is set for April 3 to determine if the TRO will be extended into a preliminary injunction.
