PANews reported on March 30 that according to The Block, the prediction market Kalshi sued Nevada and New Jersey gaming regulators after receiving a cease and desist order prohibiting it from providing sports event-related contracts in Nevada and New Jersey. It said that as an exchange regulated by the Commodity Futures Trading Commission, it is exclusively regulated by the federal government, and the Commodity Exchange Act takes precedence over state law.
On March 4, the Nevada Gaming Control Board (GCB) sent a letter to Kalshi asking it to stop offering event-based contracts in the state. The letter reads: "Kalshi is in the business of offering event-based contracts that constitute a system or method for placing bets on sporting and other events. Therefore, by offering event-based contracts in Nevada, Kalshi is operating as an unlicensed sports betting organization in violation of NRS 463.160(1)(a) and NRS 463.245(2)."
On March 27, Kalshi received a similar notice from the New Jersey Division of Gaming Enforcement (DGE), asking the market to stop offering sports-related contracts. The letter stated that Kalshi’s actions “violated New Jersey Sports Betting Law, which only permits licensed entities to offer sports betting to patrons located in New Jersey.”
At the heart of the dispute is whether trading in contracts based on events or sports constitutes gambling (which is controlled by state governments) or financial derivatives trading (which is regulated only by the federal government).
