The U.S. Supreme Court could be the next stop in the continuing legal battle between Nevada gambling regulators and New York-based prediction market KalshiEx LLC.
Kalshi, a financial services firm that operates a derivatives exchange and prediction market that offers products called event contracts for sale, was ordered on Tuesday to stop writing contracts after the Ninth Circuit Court of Appeals ruled in favor of Nevada Gaming Control in an appeal to a U.S. District Court that reversed a decision by Judge Andrew Gordon on a preliminary injunction in November.
“The Board continues to vigorously fulfill its duty to protect Nevada residents and gaming patrons and maintain the integrity of a thriving gaming industry,” said Gaming Control Board Chairman Mike Dreitzer.
Regulators claim prediction markets have taken sports bets without being licensed.
Prediction contracts have been offered for sale on Kalshi’s website and mobile app. Kalshi was active in the days leading up to the Super Bowl and some analysts suspect the reason Nevada casinos had their lowest Super Bowl betting handle since 2016 is because Kalshi took some of the action away. Kalshi indicated that they had sold an estimated $1 billion in Super Bowl contracts.
Daniel Wallach, a Florida gaming attorney, said on X that the Supreme Court could be the next stop in the legal dispute that has been ongoing since the Nevada Gaming Control Board issued a cease and desist order to Kalshi in March and the company responded with a lawsuit against individual members of the control board, the Nevada Gaming Commission and the attorney general’s office.
Since the legal skirmish between the two sides began early last year, 20 states that offer gambling have taken legal action against Kalshi, Polymarket and Crypto.com, the three biggest companies that offer prediction contracts.
Michael Selig, chairman of the Commodity Futures Trading Commission, which regulates prediction markets, on Tuesday threw his support behind Kalshi with a “friend of the court” brief. In a statement about the legal disputes, Selig said the markets have operated for two decades and serve as an accurate thermometer to measure the temperature of public opinion as a backstop to the news media.
“To those who seek to challenge our authority in this space, let me be clear,” Selig said. “See you in court.”
Other entities have also taken sides. The Nevada Resort Association works with the state to defend the gambling industry because many of its members operate legal sports books.
The prediction markets, meanwhile, have been backed by President Donald Trump, whose son, Donald Trump Jr., has invested in Polymarket through his venture capital firm and is a strategic adviser to Kalshi.
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