Nevada Casinos Seek Participation in Kalshi Betting Lawsuit
Nevada's major casino operators, through their representative trade organization, are seeking to formally participate in a federal lawsuit filed by prediction-market company Kalshi against the state of Nevada. The Nevada Resorts Association (NRA), which includes Caesars Entertainment, MGM Resorts International, Wynn Resorts and others, submitted a motion to intervene on Wednesday in the U.S. District Court for the District of Nevada.
LISTEN TO THIS ARTICLE:Kalshi, a federally certified futures exchange regulated by the Commodity Futures Trading Commission (CFTC), filed its lawsuit in March after receiving a cease-and-desist order from Nevada's attorney general. The company offers contracts that allow participants to place wagers on the outcomes of specific events, including sporting events.
Related: Nevada Judge Sides with Kalshi in Key Legal BattleWhile Kalshi is permitted to operate markets in areas such as political elections under CFTC oversight, its sports contracts are self-certified and fall outside traditional state-regulated sports betting frameworks. Nevada maintains that such contracts are in violation of state law and contravene CFTC guidelines that explicitly prohibit gaming activity. The NRA aims to be named as a co-defendant alongside the state in the ongoing legal dispute.
The NRA argues that Kalshi's operations pose a direct threat to Nevada's licensed sportsbook operators by offering similar betting opportunities under a different and less burdensome regulatory regime. The organization emphasized that Kalshi's products are effectively sports wagers repackaged as futures contracts and designed to sidestep the strict licensing, regulatory compliance and tax obligations faced by Nevada's casinos. The NRA further stated that Kalshi's approach undermines the integrity of the state's regulatory system and could disrupt the competitive balance in the market.
In its motion, the NRA described Kalshi's event contracts as indistinguishable from conventional sports bets. It rejected the idea that such products qualify as financial instruments meant for hedging or risk mitigation.
In addition, the association challenged the argument that sporting events have broader economic implications for various stakeholders. It noted that activities such as merchandise sales or television broadcasts do not influence the outcome of a game.
The NRA contends that the financial consequences of sporting events do not extend beyond the participants. Therefore, the contracts should be considered gambling, not financial derivatives.
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Lack of Regulatory Oversight and Compliance at Heart of Debate
The trade group also expressed concern about the potential implications for its members' gaming licenses. It argued that if Kalshi is allowed to offer sports-related contracts without being subject to state oversight, the value and necessity of Nevada gaming licenses could be called into question. The NRA characterized this outcome as creating a contradictory situation in which licenses become both essential and irrelevant simultaneously, thereby diminishing the clarity and effectiveness of state regulation.
The court has issued a temporary injunction preventing Nevada from enforcing its cease-and-desist order, allowing Kalshi to continue operating in the state for the time being. However, the legal contest is far from resolved, and the NRA's motion seeks to bolster the state's position by presenting the interests of established gaming operators. The organization's entry into the case is intended to support arguments for dismissing Kalshi's claims and upholding Nevada's regulatory authority.
Kalshi is facing similar legal challenges in other jurisdictions. In April, a federal judge in New Jersey granted Kalshi a preliminary injunction against that state's Division of Gaming Enforcement. The company has also filed for a comparable injunction in Maryland, as it continues to push back against state efforts to restrict its offerings in the rapidly evolving space of event-based prediction markets.
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