Events contract operator Kalshi clocked a big win against the Nevada Gaming Control Board (NGCB) late last week when a Nevada court ruled the NGCB does not have regulatory authority over predictions markets. In his ruling on the matter, Chief Judge Andrew Gordon said that Kalshi’s operations are governed by the Commodities Futures Trade Commission, not by local gaming boards. It’s a big win for Kalshi, but Judge Gordon was not necessarily optimistic that prediction marketplace operators will continue operating with impunity in the future.
The issue in Nevada, and in multiple other sports betting markets, is whether or not event predictions operators are acting as unregulated sportsbooks when they offer contracts on sporting events. Not surprisingly, the NGCB ruled that was indeed the case, but Kalshi maintains that they are governed by the CFTC, a position Judge Gordon supported saying, “Section 2’s plain and unambiguous language grants the CFTC exclusive jurisdiction over accounts, agreements and transactions involving swaps or contracts of sale of a commodity for future delivery that are traded or executed on exchanges that the CFTC has designated….” w
“Nevada regulatory agencies thus have no jurisdiction to decide that Kalshi’s conduct violates state law where, at least at present, those activities are legal under federal law,” the judge said in comments reported on by Front Office Sports.
Judge Gordon went on to say that Kalshi could still lose its case in Federal Court that’s aimed at determining whether or not events prediction markets can offer sports contracts at all. But given the fact that Kalshi board member Brian Quintenz is the incoming CFTC Commissioner, Kalshi’s chances of getting anything they want from the Commission remain extremely high.