Kalshi has launched a lawsuit against the Nevada Gaming Control Board and the New Jersey Division of Gaming Enforcement following cease and desist orders aimed at halting its sports-related contracts in those states. The company argues that its event contracts offer traders a hedge against market risks and are regulated under the jurisdiction of the Commodities Futures Trading Commission (CFTC), not state authorities. Kalshi contends that its contracts function as swaps, distinguishing them from traditional sports betting models controlled by the house. Co-founder Tarek Mansour emphasized the importance of prediction markets, describing them as a significant innovation often initially misunderstood. The Nevada Gaming Control Board's actions also extended to election contracts, with a previous court ruling allowing the contracts to proceed. In February, the acting CFTC director indicated a shift towards prioritizing fraud enforcement, which was well-received by industry participants. The CFTC subsequently scrutinized Super Bowl event contracts from Kalshi and Crypto.Com, but took no action to prohibit them.

Source 🔗