Prediction market provider Kalshi has suffered a major legal blow in Nevada after a state judge upheld a preliminary injunction against the platform. Judge Jason Woodbury of the First Judicial District Court ruled that Kalshi’s offerings, contracts based on sports, entertainment, and elections, constitute unlicensed gambling under Nevada law.
A Definitve Stance on Sports Contracts
The court’s decision rested on the determination that purchasing a contract tied to a specific sporting outcome is functionally identical to betting through a licensed sportsbook. Crucially, Judge Woodbury questioned Kalshi’s assertion that its products are federally regulated “swaps” overseen by the CFTC, rather than gaming products subject to state oversight.
U.S. Gaming Law Attorney Daniel Wallach from Nevada noted the significance of the ruling on LinkedIn:
“Big win for Nevada, which now joins Massachusetts as the first two states to secure a preliminary injunction vs Kalshi.”
Fragmented Legal Landscape
The ruling arrives as the U.S. regulatory environment for prediction markets remains highly fragmented. While Kalshi has successfully lobbied for federal recognition in some areas, Nevada and Massachusetts are taking a hardline stance to protect their domestic gaming frameworks.
The Nevada Council on Problem Gambling and the Dr. Robert Hunter International Problem Gambling Centre have also intervened, filing amicus briefs that highlight concerns over Kalshi’s high transaction speeds and product designs, which they argue could increase the risk of compulsive behavior.
The case is now set to proceed to the Ninth Circuit Court of Appeals, where the definition of “event trading” will face its ultimate test.
