Nevada Pushes to Uncover Information in Ongoing Legal Fight with Kalshi

Nevada’s Attorney General has asked a federal judge to make prediction market operator Kalshi, turn over a broad set of internal messages and files. This is part of the state’s attempt to figure out if Kalshi’s sports event contracts follow state law.

Nevada Pushes for Discovery, Disputes Kalshi’s Bid to Skip Fact-Finding

In a motion submitted to the US District Court for the District of Nevada, lawyers representing the state expressed their need for evidence about how Kalshi designs and runs its contracts. They also want information on how these products have been discussed with the Commodity Futures Trading Commission (CFTC) federal officials and CFTC chair nominee Brian Quintenz. The state lawyers also asked for specifics on Kalshi’s institutional market makers and the companies involved in its Nevada operations, including lobbyists and marketing agencies.

The push to uncover facts comes after Kalshi argued that the disagreement centers on how to interpret the law and whether federal law trumps Nevada gaming laws, making more fact-checking pointless. Nevada hit back, saying there is no agreed-upon record and that several of Kalshi’s claims, like the supposed threat to its survival if it cannot operate in Nevada, cannot be checked without looking at internal numbers.

Lawyers for the state accused Kalshi of trying to limit fact-gathering while submitting its own proof to back up its request for a quick decision, which could end the case before it goes to trial. They also challenged Kalshi’s claim that discovery would be too much work, pointing out the company’s $2 billion value after a June funding round.

Legal Dispute Over Prediction Markets Pits Nevada Gaming Laws Against Federal Oversight

The materials requested include all sports-related contracts offered to Nevada residents, records showing efforts to follow state gaming laws, and talks with market maker Susquehanna International Group. They also ask for documents that discuss how Kalshi’s contracts affect the economy.

The fight started in March when the Nevada Gaming Control Board sent a letter, telling Kalshi to stop operations, saying the company was running unlicensed sports betting and election-based contracts in the state. Kalshi fought back by suing, claiming that the Commodity Exchange Act gives the CFTC sole power over its products. In April, Kalshi got a temporary court order that lets it keep working in Nevada until a final decision comes down.

Nevada’s broader legal position, outlined in previous filings, argues that federal law does not override the state’s gaming regulations. Officials say federal statutes do not remove state control over gambling activities.

They also claim that long-standing police powers allow Nevada to control gaming within its borders. The court has not decided on Nevada’s request for information or Kalshi’s motion for a quick ruling, yet. How this case turns out could set a key example for how prediction markets offering sports-based products deal with state gambling laws.