A decisive blow landed in Nevada for the prediction market operator Kalshi, as a federal judge firmly rejected their plea for a stay. Judge Andrew Gordon’s ruling effectively removes the last legal barrier protecting Kalshi from state enforcement actions, escalating a brewing conflict between federal and state regulatory powers.
The news, swiftly reported by betting journalist Daniel Wallach, confirms Judge Gordon’s denial of Kalshi’s motion. His order leaves Kalshi vulnerable to the same fate as Crypto.com, another prediction market provider previously targeted by Nevada regulators – a stark warning of what’s to come.
Judge Gordon reinforced his position, stating the denial stemmed from the reasoning outlined in his earlier order dissolving the preliminary injunction. This means Kalshi loses its legal shield while appealing the state’s ban, a ban aggressively pursued by Nevada’s regulatory bodies.
The situation marks a dramatic shift from earlier this year when Judge Gordon initially sided with Kalshi. He subsequently dismantled Crypto.com’s legal defense, paving the way for Nevada to challenge both companies, who operate under the oversight of the Commodity Futures Trading Commission (CFTC).
A temporary reprieve would have allowed Kalshi to continue its growth, but Nevada has proven to be increasingly hostile territory for prediction markets. The judge’s decision effectively halts any momentum, signaling a potential retreat from the state.
This case highlights a fundamental tension in the expanding world of prediction markets: the clash between state-level gambling laws and the federal authority granted by the CFTC. Kalshi has consistently challenged these state regulations, arguing the CFTC’s approval should supersede local restrictions.
Kalshi’s aggressive expansion has already drawn scrutiny from multiple states, including Maryland, New York, and Ohio. However, Nevada’s actions suggest the West Coast may no longer be a viable market for the company, intensifying the ongoing battle for regulatory control.
Judge Gordon closed the door on further appeals, denying a motion for leave to file a surreply, deeming it unnecessary. The ruling leaves Kalshi facing an uncertain future in Nevada, and underscores the growing challenges prediction markets face navigating a complex and often conflicting regulatory landscape.
