Nevada Federal Court Dissolves Kalshi’s Preliminary Injunction

• A federal judge has dissolved a preliminary injunction from Kalshi in Nevada
• A request from the Nevada Gaming Control Board for a temporary restraining order against Kalshi had previously been denied
• The status of sport event contracts in Nevada is now in question
  

Nevada Federal Judge Andrew Gordon late yesterday dissolved a preliminary injunction he had granted Kalshi back in April, sending the state of sports event contracts in Nevada into flux.

Gordon previously granted the preliminary injunction to Kalshi, denying a request from the Nevada Gaming Control Board for a temporary restraining order against the company to block the trade of sports events contracts.

However, Gordon has since denied a similar preliminary injunction to Crypto.com and wrote in his latest ruling that Kalshi’s interpretation of sports betting would require all such gaming to come under the jurisdiction of the Commodity Futures Trading Commission (CFTC).

A Change in Course

In his latest ruling, Gordon noted that his original decision on the injunction was “issued very early in this litigation on an accelerated schedule. The law and facts have evolved in this court and others.”

Circumstances will likely continue to change as other states rule on similar lawsuits involving Kalshi and Crypto.com, he said.

“Kalshi now contends that it is not taking sports bets and, even if it were, no state can regulate it because it is a DCM under the CFTC’s exclusive jurisdiction. Kalshi relies on a strained reading of the already convoluted Commodities Exchange Act in an attempt to evade state regulation. Kalshi’s interpretation would require all sports betting across the country to come within the jurisdiction of the CFTC rather than the states and Indian tribes. That interpretation upsets decades of federalism regarding gaming regulation, is contrary to Congress’ intent behind the CEA, and cannot be sustained,” Gordon wrote.

He continued, noting that the injunction will be dissolved because Kalshi is not likely to succeed on the merits of its lawsuit, although “there are serious questions on the merits.”

An appeal from Kalshi of Gordon’s latest decision is likely coming. If an appeal isn’t granted, Kalshi will likely have to cease its sports event contracts in the state, similar to Crypto.com, throughout the course of the lawsuit.

Working Things Out in Nevada

KalshiEX LLC filed its lawsuit against the Nevada Gaming Control Board (NGCB) for a cease-and-desist notice sent to the company regarding their sports event prediction markets earlier in the year.

The Nevada Gaming Control Board levied a cease-and-desist notice against Kalshi in early March, ordering the company to stop offering its sports event contract markets in the state by March 14. Kalshi did not acquiesce to the notice.