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A federal judge in Nevada said he is leaning toward dissolving the injunction involving the popular prediction market Kalshi.
US District Court of Nevada Judge Andrew Gordon said he would have a written decision within two weeks.
From Yogonet
The judge questioned whether some of Kalshi’s sports-related contracts meet the legal standards for derivatives, noting, “It seems like your definition is so broad that pretty much anything can become a swap — anything can have a financial consequence.” He added, “Nobody thought sports bets were commodities or excluded commodities or swaps until some brilliant people at Kalshi.”
Kalsh, which insists its platform is legal under federal regulation,i sued Nevada regulators in March after receiving a cease-and-desist letter directing the company to stop offering what the state viewed as unlicensed gambling.
Kalshi wrote in its lawsuit: “Event contracts are a quintessential example of a derivatives contract—they are a type of option.”
They also argue the firm is regulated by the Commodity Futures Trading Commission (CFTC) and that its operations fall under federal jurisdiction rather than state gambling law.
“We’re always happy to be heard in court and take the judge’s instruction to confer with the state seriously,” a Kalshi spokesperson said. “In the meantime, we will continue to operate our national exchange in compliance with federal law.”
It should be noted that Gordon did not grant a similar injunction to Crypto.com last month.
Renowned gaming attorney Daniel Wallach noted that this judge last week suggested that FanDuel’s and DraftKings’ abandonment of Nevada licensing process causes harm to NV.
“That’s the first snowball in the avalanche that rolls down the hill,” Judge Gordon quips.
- Gilbert Horowitz, Gambling911.com
