Nevada state authorities have been cleared to issue a temporary restraining order against prediction market platform Kalshi.
Summary
- A federal appeals court denied Kalshi’s request to halt proceedings, clearing the way for Nevada regulators to pursue a temporary restraining order against the platform.
- Industry experts say Kalshi may be forced to exit Nevada for at least 14 days if the order is issued, as such rulings are not appealable under state law.
On Thursday, the Ninth Circuit Appeals Court denied Kalshi’s emergency request to stay proceedings. The case will now be sent back to federal court, where Nevada regulators can proceed with enforcement action.
According to Gaming lawyer Daniel Wallach, this would likely result in a temporary restraining order and noted that Kalshi would not be able to operate in the state for at least 14 days, as the order is “not appealable under Nevada law.”
“Kalshi would be required to exit the state in the interim,” he added.
The case stems from a cease and desist issued against the platform in March, where regulators claimed that the platform offered unlicensed sports betting under the state’s gaming laws.
Kalshi, in the meantime, has countered these claims, arguing that its contracts fall under the federal jurisdiction of the Commodity Futures Trading Commission, which means any restriction imposed by the state would conflict with federal oversight and would also cause its business imminent harm.
Similar actions have emerged across a number of other U.S. states, with lawmakers claiming that sports event contracts may violate local gambling laws. States like Connecticut, New York, and New Jersey have taken steps against sports event contracts that have targeted Kalshi and many of its competitors, like Polymarket and Crypto.com.
Meanwhile, the U.S. Commodity Futures Trading Commission chairman, Michael Selig, has said that the commission will establish a federal rulebook for prediction markets while asserting exclusive jurisdiction over such products.
Prediction markets like Kalshi and Polymarket have recently surged in activity, with weekly trading volumes exceeding $2 billion. As previously reported by crypto.news, ultra-short duration contracts have become increasingly popular, with five to 15-minute bets now accounting for a significant share of trading on these platforms.
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