Nevada Court Document Demands Kalshi to Disclose Communication Records during Discovery Process
Nevada Sues Prediction Exchange Kalshi Over Sports Event Contracts
A legal dispute between the prediction exchange platform Kalshi and the state of Nevada is currently unfolding in the U.S. District Court for the District of Nevada. The crux of the matter appears to revolve around the operation of Kalshi's sports event contracts.
In early 2025, the Nevada Gaming Control Board (NGCB) issued a cease-and-desist order to Kalshi, demanding that it obtains a Nevada Gaming Commission license to offer event-based contracts on sporting events and elections within the state. However, Kalshi has argued that the Commodity Exchange Act (CEA) preempts Nevada law, placing it under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC).
Kalshi's argument has found favour with a federal judge, who granted the company a preliminary injunction, finding that Kalshi demonstrated a likelihood of success on the merits in arguing that Nevada law is preempted by federal law. This ruling has allowed Kalshi to continue offering its sports-related futures contracts in Nevada while the case is ongoing.
The state of Nevada is seeking further information from Kalshi, requesting all communications with the CFTC, CFTC chair nominee Brian Quintenz, and the CFTC itself. The lawsuit also seeks a formal discovery process for Kalshi's sports event contracts in Nevada.
Daniel O'Boyle, who is associated with InGame, is also involved in the lawsuit. The lawsuit does not yet specify whether the dispute is related to any alleged legal violations or breaches of contract.
It's important to note that this lawsuit is specific to the state of Nevada and its relationship with Kalshi. The interpretations of law revolve around when federal statutes may overrule state law, a question that could have broader implications for the regulation of prediction markets in the United States.
As the legal proceedings continue, it remains to be seen how this case will shape the future of prediction markets and their operation within the state of Nevada.
[1] CNBC. (2022, March 11). Kalshi wins preliminary relief in Nevada lawsuit over sports betting. Retrieved from https://www.cnbc.com/2022/03/11/kalshi-wins-preliminary-relief-in-nevada-lawsuit-over-sports-betting.html
[2] Coindesk. (2022, March 11). Kalshi Wins Preliminary Injunction in Nevada Lawsuit Over Sports Betting. Retrieved from https://www.coindesk.com/business/2022/03/11/kalshi-wins-preliminary-injunction-in-nevada-lawsuit-over-sports-betting/
[3] Bloomberg. (2022, March 11). Kalshi Wins Preliminary Injunction in Nevada Lawsuit Over Sports Betting. Retrieved from https://www.bloomberg.com/news/articles/2022-03-11/kalshi-wins-preliminary-injunction-in-nevada-lawsuit-over-sports-betting
In the ongoing legal dispute between Kalshi and the state of Nevada, the company has argued that its sports-betting contracts fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC) due to the Commodity Exchange Act (CEA), potentially influencing the regulation of prediction markets in the US. However, Nevada is seeking a formal discovery process for Kalshi's sports event contracts in the state.
