Nevada Judge Sides with Kalshi in Key Legal Battle
Kalshi has secured an important legal win that will allow it to maintain its sports event markets in Nevada.
LISTEN TO THIS ARTICLE:A U.S. District Court judge granted the exchange a preliminary injunction against the Nevada Gaming Control Board, which suggests he has confidence in Kalshi’s legal argument.
In a 17-page opinion published following the ruling, Judge Anthony Gordon elaborated on his decision to block enforcement actions against Kalshi. He explained that Kalshi has “shown a likelihood of success on the merits” while denying the state’s request for its own injunction, stating the defendants had not met the standard for such relief.
Second Important Legal Victory
The decision is the second important victory in Kalshi’s wider legal campaign. Last October, the company won in the U.S. Court of Appeals against the Commodity Futures Trading Commission (CFTC), which gave it the ability to list election-related contracts ahead of the 2024 presidential election. That ruling is under appeal in the D.C. Circuit Court, and its outcome could have implications for the Nevada case.
The ruling means that Kalshi is permitted to continue offering sports event contracts in the state while litigation proceeds. More broadly, it is the first federal judicial support for Kalshi’s position that, as a federally regulated exchange, it is not bound by state-level sportsbook licensing rules.
This week’s ruling is the first in a new wave of legal actions by Kalshi as it seeks to fend off cease-and-desist orders from various state gaming authorities. The company filed a separate suit in March against New Jersey’s Division of Gaming Enforcement. That case is also progressing, with New Jersey’s response due by April 18 and a hearing set for April 30.
In addition to Nevada and New Jersey, Kalshi has received similar warnings from gaming regulators in Illinois, Maryland, Montana, and Ohio. However, it has not yet initiated legal action in those states.
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Risk of Lasting Harm if Trading Halted
Judge Gordon acknowledged that Kalshi’s operations carry risk, particularly if the D.C. Circuit eventually rules against the company or if the CFTC acts to restrict its offerings. However, he noted that forcing Kalshi to halt trading immediately could inflict lasting harm.
So requiring Kalshi to stop altogether and lose goodwill or damage its reputation; to spend millions to geofence, which might result in losing its CFTC designation; or to continue doing what it is doing and face civil and criminal liability in Nevada suffices to show a likelihood of irreparable harm for at least a short-term injunction.
He concluded that broader policy questions regarding Kalshi’s business model should be addressed by the CFTC and Congress, not the courts.
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