Nevada Judge Upholds Kalshi Ban, Says It Should Adopt Geofencing by May 4

Friday marked a major breakthrough in Nevada’s battle against prediction markets as a judge ruled in favor of the Kalshi block. This comes shortly after the CFTC launched lawsuits against several states that attempted to regulate the fast-growing event contracts sector.

Nevada Judge Upholds the Restrictions on Kalshi

Last Friday, Nevada judge Jason Woodbury upheld the restrictions on Kalshi, under which the company cannot offer its products to local customers without a license. This follows the initial restraining order against the prediction markets operator that was issued on March 20. Woodbury extended the suspension through April 17, granting enough time for the completion of the longer-term injunction.

Under the latest ruling, Kalshi would be required to implement geolocation measures to block players in Nevada from accessing its products. The company must comply with this by May 4.

When reminded that Kalshi defines itself as a trading platform, Woodbury argued that sports betting and prediction markets are indistinguishable, despite the technical differences.

The latest ruling in Nevada marks a triumph for the critics of the prediction markets sector, which includes gaming regulators, tribal bodies, traditional gaming industry stakeholders, and citizens.

Prediction Markets Face Pushback

Prediction markets have become a point of contention due to their novel approach to trading. Platforms like Kalshi allow users to trade yes-no shares in the outcomes of various events (event contracts). Unlike the sports-oriented sportsbooks, prediction markets also allow participants to predict the outcomes of political events, legal developments, and cultural happenings, making them a reliable alternative to polling.

However, the similarities of prediction markets to sports betting have irked many, leading to widespread opposition to the vertical. This has led to multiple lawsuits and tensions between the CFTC, which is responsible for regulating trading markets, and state gambling regulators.

Some state regulators believe that prediction markets, due to their similarities to gaming, should follow the same rules as gaming companies. The CFTC, on the other hand, has firmly rejected this idea and has launched lawsuits against states trying to rein in the sector.