By Nate Raymond
March 20 (Reuters) - A Nevada judge on Friday temporarily blocked prediction market operator Kalshi from offering events contracts that would allow the state's residents to place financial bets on its platform related to sports, elections and entertainment.
Carson City District Court Judge Jason Woodbury issued a temporary restraining order at the behest of the Nevada Gaming Control Board that will prevent Kalshi from continuing to operate in the state without a license.
The judge's
decision followed a months-long legal battle by Kalshi aimed at preventing Nevada from becoming the second state to obtain a court order that would bar it from operating in its jurisdiction amid an escalating battle over the ability of state gaming regulators nationally to police prediction market operators.
"Prediction markets, to the extent they facilitate unlicensed gambling, are illegal in Nevada, and we have a statutory duty to protect the public," Nevada Gaming Control Board Chair Mike Dreitzer said in a statement.
Kalshi declined to comment.
Prediction market operators like Kalshi let users place financial bets on the outcome of a wide range of events such as sports and elections by trading "events contracts."
The Nevada Gaming Control Board sued Kalshi last month, alleging that by offering sports and other event contracts to users through its platform, the company was engaged in wagering activity under Nevada state law and needed to be licensed.
Kalshi argued that such contracts fall under the Commodity Futures Trading Commission's exclusive jurisdiction. The agency under President Donald Trump has backed prediction markets in their legal fight against claims by states that they are unlicensed gambling operations.
But Woodbury rejected that argument and said the board retained the authority to pursue a case against the company. By offering events contracts related to college basketball, professional football games and elections, Kalshi was operating a "sports pool" under Nevada gaming law, the judge wrote.
He scheduled an April 3 hearing to consider whether to issue a longer-term preliminary injunction.
The ruling followed a decision by a Massachusetts judge last month who issued an injunction barring Kalshi from offering sports events contracts in the state. That ruling has been put on hold while Kalshi appeals.
Arizona on Tuesday became the first state to criminally charge Kalshi with operating an illegal gambling business, and the company has sued to block other states from pursuing enforcement actions.
(Reporting by Nate Raymond in Boston; Editing by Nia Williams)
