A US appellate court has denied Kalshi's request to prevent the Nevada gaming regulator from imposing a temporary restraining order on its sports-related contracts. Gaming lawyer Daniel Wallach suggests a temporary restraining order against Kalshi is likely, preventing operation in Nevada for at least 14 days pending a hearing. Kalshi argues its contracts fall under federal jurisdiction and a block would cause harm. Other states like Connecticut, New York, and New Jersey are also challenging sports event contracts offered by Kalshi and other platforms.
A federal appeals court has denied Kalshi's emergency request to halt a lower court proceeding, potentially leading to a temporary restraining order (TRO) against Kalshi in Nevada. The Nevada Gaming Control Board issued a cease-and-desist order in March, arguing Kalshi's sports event contracts constitute unlicensed sports betting. Kalshi contends its contracts are under the exclusive federal jurisdiction of the Commodity Futures Trading Commission (CFTC). Kalshi also argued that allowing Nevada to proceed with a TRO could create conflicting rulings and jurisdictional confusion, especially with federal litigation pending.
Prediction markets like Kalshi and Polymarket have seen increased trading volumes, exceeding $2 billion weekly, attracting scrutiny from lawmakers concerned about insider trading and market manipulation. Kalshi, along with competitors like Crypto.com, Polymarket, and Coinbase, faces legal challenges from multiple states, including Connecticut, New York, and New Jersey, regarding sports event contracts.
Key takeaways:
- A US appeals court has cleared the way for Nevada to enforce a temporary restraining order against Kalshi, potentially blocking its sports-related contracts.
- Kalshi argues its contracts fall under federal jurisdiction and that a ban would cause significant harm.
- Other states are also challenging Kalshi and similar platforms over sports event contracts.
- Prediction markets are experiencing increased scrutiny amid rising trading volumes.