Recently, a federal judge in Nevada revealed that he might overturn his own ruling from April, putting the operating license of the prediction market platform Kalshi in Nevada at imminent risk.
The judge leans towards overturning the original decision
After the hearing, District Court Judge Andrew Gordon expressed his inclination to revoke the preliminary injunction issued in April, which temporarily exempted Kalshi from complying with state anti-gambling regulations. The judge expects to issue a formal decision within two weeks, and honestly, the case is quite complex.
Legal dispute focuses on regulatory authority
Kalshi insists it is regulated by the U.S. Commodity Futures Trading Commission (CFTC), and that state governments have no right to interfere. However, the judge questioned whether their sports event contracts qualify as genuine financial derivatives, bluntly stating, "By your logic, nearly anything could be considered a swap transaction!" This is how regulatory gray areas lead to disputes.
Lawsuits in multiple states show varying outcomes
Not just in Nevada, Kalshi also faces similar legal battles in other states. A judge in California recently rejected a tribe's request to ban operations, while New Jersey issued an injunction preventing state government interference; however, a judge in Maryland denied Kalshi's application. Currently, related lawsuits are ongoing in at least six states across the U.S.
Industry chain reaction continues to ferment
As gambling giants like DraftKings also aim to enter the prediction market, states are beginning to warn that this could jeopardize their existing licenses. Last week, FanDuel and DraftKings simply gave up their Nevada license applications and withdrew—indicating that this wave of regulatory turmoil is far from over.
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