The U.S. District Court judge hearing a New York prediction market firm’s bid to offer contracts on sports results, similar to taking sports bets, has granted a request to dissolve a preliminary injunction against the state.
U.S. District Judge Andrew Gordon said Friday that he is leaning toward granting the state gaming regulatory boards’ request to dissolve the injunction, which would effectively bar KalshiEx LLC from writing intrastate sports betting contracts until the company’s lawsuit against the Nevada Gaming Control Board is resolved.
Experts have predicted that the dispute could ultimately be taken to the US Supreme Court.
The judge encouraged both Kalshi and the state to find a resolution to the dispute before ruling on the injunction request.
Kalshi filed a lawsuit in March against the control board, the Nevada Gaming Commission and each of its individual members after the control board issued a cease and desist order barring Kalshi from writing prediction contracts — yes-or-no propositions involving sporting event results similar to sports betting.
After a 2½-hour hearing, Gordon said he did not want to rush a decision, but was leaning toward ending the injunction. He asked lawyers from both parties to try to reach a resolution to their dispute before November 24.
Gordon spent most of the morning asking a series of questions of Kalshi’s representative, William Havemann, and the regulators’ attorney, Nicole Saharsky.
If the parties cannot find a compromise, court hearings are expected to begin next month to determine whether derivatives markets can enter contracts, even within states that have not legalized sports betting.
In Nevada, the concern of regulators and the Nevada Resort Association, which applied to be part of the lawsuit, is that companies that predict the market such as Kalshi, Robinhood and crypto.com offer sports betting without being licensed and have fewer protections against gambling by minors without protection against gambling problems.
The Kalshi representative said what the company offers is not sports betting, although the company markets itself as the only sports betting operation in all 50 states.
Nevada regulators are also concerned that the state is not collecting any gaming tax revenue from Kalshi on its prediction contracts and has an unfair advantage over licensed operators.
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