After oral arguments in a Nevada District Court, financial company Kalshi has been granted a temporary restraining order that will keep its sports contracts online in the state.
Chief Judge Andrew Gordon only offered a brief judgment on the case but will write a longer explanation of his decision in the coming weeks.
Kalshi requested the restraining order as well as a temporary injunction after filing suit against the Nevada Gaming Control Board (NGCB). Kalshi CEO celebrated the court victory on X:
The NGCB sent Kalshi a cease and desist letter last month when the operator started offering sports-related event contracts. After debuting them with the Super Bowl, Kalshi expanded into NCAA men’s basketball games for March Madness.
The NGCB contends that these offerings violate the state’s gaming laws and that they are tantamount to illegal, unlicensed sports betting.
In its suit, Kalshi argued that the company is utilizing the regulated offerings afforded to it by the Commodities Futures Trading Commission (CFTC) and invoked the Supremacy Clause of the Constitution that these protections supersede state gaming laws.
In its response, Nevada pointed out that in Kalshi’s election contract court case, the company noted that the legislation enabling event contracts was never intended to include sporting events.
However, in its own retort to the NGCB, Kalshi argued that the board misunderstood its argument:
“Kalshi’s brief noted that the legislative history indicated that Congress believed event contracts involving gaming may raise public-interest concerns. At the end of that discussion, however, Kalshi’s brief made clear that the consequence of Congress’s concern was that Congress ’empower[ed] the CFTC to at least review the category of game-based contracts.’
“Congress did not ban gaming event contracts, but instead delegated the power to review those contracts to the CFTC based on the CFTC’s discretionary judgment as to the public interest.”
While the case moves forward, Kalshi can continue to offer event contracts related to sports in the Silver State, but the case is far from over, as is the similar lawsuit in New Jersey.
