The prediction platform Kalshi has initiated a lawsuit against the Nevada Gaming Control Board and the New Jersey Division of Gaming Enforcement. This decision follows the regulators’ demands to prohibit trading of event contracts in these states.
This is reported by Business • Media
Details of Kalshi’s Lawsuit
The company’s lawyers argue that their activities are regulated by the Commodity Futures Trading Commission (CFTC), and the contracts they offer are bilateral swaps, not sports bets. Kalshi co-founder Tarek Mansour emphasized that prediction markets are an innovative solution that is often misunderstood. He added that the company is prepared to defend its interests in court.
“BREAKING: Kalshi has filed a lawsuit in Nevada federal court seeking an “immediate temporary restraining order and preliminary injunction” against the Nevada Gaming Control Board for “unconstitutionally threatening” to prohibit all trading of @kalshi’s event-based contracts.”
Changes in CFTC Regulation
Kalshi is also challenging the ban on election-related contracts that was imposed in Nevada, despite a U.S. court ruling them legal in 2024. This decision allowed the company to offer such contracts on a national level.
Meanwhile, the CFTC announced a shift in its regulatory approach. On February 4, 2025, Acting Director Caroline Pham stated that the regulator would focus on combating fraud rather than strict oversight. This change was positively received by market participants following the previous stringent oversight by the Biden administration.
Additionally, the CFTC considered the legality of Super Bowl event contracts proposed by Kalshi and Crypto.com, but ultimately took no action to ban them, confirming their compliance with U.S. derivatives laws.