Predictive Market Kalshi sues Nevada and New Jersey Gambling Commission after receiving ban

PANews March 30th news, according to The Block, forecast market Kalshi sued gambling regulators in Nevada and New Jersey after receiving a cessation order banning it from offering sports-related contracts in Nevada and New Jersey. It is said that as an exchange regulated by the Commodity Futures Trading Commission, it is subject to exclusive supervision by the federal government, and the Commodity Trading Act takes precedence over state laws.

On March 4, the Nevada Gaming Administration Commission (GCB) sent a letter to Kalshi asking it to stop offering event-based contracts in the state. "Kalshi's business is to provide event-based contracts that constitute a system or method for betting on sports events and other events. Therefore, by providing event-based contracts in Nevada, Kalshi operates as an unauthorized sports betting agency, in violation of NRS 463.160(1)(a) and NRS 463.245(2)."

On March 27, Kalshi received a similar notice from the New Jersey Gaming Law Enforcement Department (DGE) asking the market to stop providing sports-related contracts. The letter reads Kalshi's actions “violate the New Jersey Sports Betting Act, which only allows licensed entities to provide sports betting to customers located in New Jersey.”

The core of the dispute is whether contract transactions based on events or sports constitute gambling (controlled by the state) or financial derivatives transactions (regulated by the federal government only).