A Nevada judge has reportedly extended an injunction preventing Kalshi from offering event-based deals in the state, ruling that the products constitute unlicensed gambling under state law.
Judge Jason Woodbury said at Friday’s hearing in Carson City that he would grant a preliminary injunction requested by the Nevada Gaming Control Board prohibiting the company from allowing residents to transact on outcomes such as sporting events, elections and entertainment events without a gaming license, According to to Reuters.
The decision extends a momentary restraining order issued on March 20, which will remain in effect until April 17 while the court finalizes long-term restrictions.
New York-based Kalshi argued that its contracts are financial derivative instruments, specifically “swaps,” that are subject to the exclusive supervision of the Commodity Futures Trading Commission (CFTC).
Related: Appeals court rejects Kalshi’s request to block enforcement efforts in Nevada
The judge says Kalshi’s contracts reflect sports betting
According to Reuters, Woodbury rejected Kalshi’s argument, saying there was a direct comparison between time-honored sports betting and Kalshi’s platform. He said that according to the report, placing a bet through a licensed bookmaker and purchasing a contract tied to the outcome of a game are functionally the same.
“No matter how you slice it, this conduct is indistinguishable,” the judge reportedly said, adding that such activity qualifies as gaming under Nevada law and cannot be offered without the appropriate license.
This case is the first in history in which the state obtained an injunction against a company.
Last month, Utah lawmakers also passed a bill targeting Kalshi and Polymarket that would classify proposition bets on in-game events as gambling, with the goal of blocking such offers in the state.
Related: Kalshi CEO slams Arizona criminal charges as ‘total overreach’
The CFTC announces a court fight over supervision of the forecasting market
The CFTC does he stated power over forecasting markets, with Michael Selig as chairman warning that the agency is prepared to defend its jurisdiction in court against any challenges from states or other regulatory authorities.
Speaking at an industry conference last month, Selig said prediction markets can act as “truth machines,” arguing that when participants pay money for their views, these markets can generate more crystal clear and reliable signals about future events than time-honored opinion polls.
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