Kalshi progresses in Nevada as Michigan focuses on sports contracts.

Summary

• Kalshi Secures Pivotal Legal Victory in Nevada
• The platform asserts that it is governed by federal law.
• Michigan is the most recent state to take action against the platform.

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Kalshi, a leading future prediction market, has achieved a significant victory against gambling regulators in the United States, particularly in Nevada. A ruling by U.S. District Court Judge Anthony Gordon allows the company to continue offering its sports contracts despite receiving a cease-and-desist letter from the Nevada Gaming Control Board. The platform successfully argued that the board lacked a legal foundation to demand its shutdown.

Kalshi notches up the important legal win in Nevada

Kalshi is not alone in facing pressure in Nevada; up to nine states have also taken a stand against the platform, which has seen growing demand for prediction markets on popular sports events. Massachusetts and Connecticut have announced plans to investigate these platforms. Meanwhile, Nevada, New Jersey, Michigan, Illinois, Maryland, Montana, and Ohio have adopted a more aggressive stance. In his ruling, Judge Gordon stated that the Nevada Gaming Control Board (NGCB) failed to demonstrate a

leading him to deny their motion. This decision marks a significant victory for Kalshi and comes just over a week after the company declared its intention to pursue legal action against both the NGCB and the New Jersey Division of Gaming Enforcement. Thanks to Judge Gordon's interpretation and application of the Supremacy Clause—which allows federal law to override state supervision in certain situations—Kalshi may now proceed without concern for state-level obstacles. Kalshi's sports contracts appear to fall under this federal protection. Kalshi maintains that it is governed by federal law under the Commodity Futures Trading Commission (CFTC) and is not subject to state gambling regulators, a position reaffirmed in the recent legal decision. Kalshi's CEO, Tarek Mansour, has been vocal about highlighting this distinction. The platform functions as an exchange where contracts are created between parties, whether related to the outcome of a March Madness game or a political contest. This puts it under CFTC regulation, as it facilitates contracts rather than setting the odds itself. Gambling regulatory bodies, however, see this as an attempt to offer sports betting-like services without complying with regulatory standards.

Michigan takes a look at unlicensed sports prediction markets

Despite Kalshi's seemingly solid legal standing, gambling regulators across the United States have banded together to launch their own investigations. The Michigan Gaming Control Board is the latest to join, stating that prediction markets

the state's regulatory systems and expressing concerns about consumer protection. said Henry Williams, Executive Director of the MGCB. The board highlighted the loss of tax revenue as a primary concern, along with risks posed to consumers by platforms like Kalshi, which include potential identity fraud and inadequate data security. Kalshi has yet to address many of these legal issues, and while an injunction may provide temporary relief, the legal battle is far from over. Prediction markets are not yet fully established within the U.S. betting and entertainment industry.