Kalshi Lawsuit Could Shake Up Nevada Sports Betting Industry

Kalshi Lawsuit Could Shake Up Nevada Sports Betting Industry

LAS VEGAS — A federal court is weighing whether the Nevada Resort Association (NRA) can intervene in a lawsuit that could alter the future of sports betting in the state.

U.S. District Court Judge Andrew Gordon said he will move quickly to determine if the NRA can join a case brought by KalshiEx LLC, a New York-based company running a federally regulated prediction market. Kalshi filed the suit on March 28 after Nevada regulators ordered it to stop offering event contracts that resemble sports bets.

The Nevada Gaming Control Board, which moved to dismiss the case in April, argues that Kalshi must hold a state gaming license. Kalshi maintains it is regulated by the federal Commodity Futures Trading Commission (CFTC), and that federal oversight gives it the right to operate in any state, regardless of local gambling laws.

$7.8 Billion at Stake

The NRA, which represents 70 casino resorts across Nevada, filed its motion to intervene on May 14. The organization argues that Kalshi’s operations threaten Nevada’s $7.8 billion legal sports betting industry. Gordon has set a deadline of May 28 for the NRA to respond to Kalshi’s objections.

In its court filing, the NRA said, “The consequences from this litigation for the NRA’s members are seismic.” It emphasized that Kalshi’s contracts function like traditional sports bets but bypass Nevada’s regulatory system and tax structure.

A temporary restraining order currently protects Kalshi from being shut down by the state.

Kalshi’s advertising has also drawn criticism. The NRA pointed to social media promotions claiming Kalshi is “the first app for legal sports betting in all 50 states,” a message that state regulators say blurs the line between futures trading and illegal sports wagering.

The company also faced pushback for offering election-related contracts, a violation of Nevada’s constitutional ban on election betting.

Wider Fallout

Nevada was the first of seven states to issue a cease-and-desist letter to Kalshi. Arizona, New Jersey, Maryland, Montana, Ohio and Illinois followed with similar actions. Kalshi responded by filing lawsuits and has so far secured temporary injunctions in Nevada and New Jersey, shielding it from state enforcement.

Arizona’s top gaming official, Douglas Jensen, rejected Kalshi’s claims that it operates under federal innovation laws. “There is no meaningful difference between buying one of your offered contracts and placing a bet with any other sportsbook,” he wrote in a warning letter to the company.

Expert Opinions and Political Ties

Legal experts, such as gaming law scholar I. Nelson Rose, say prediction markets can improve forecasting accuracy. But he also noted political factors in Kalshi’s rise, including Donald Trump Jr.’s role as a paid adviser and past ties between the company and former CFTC commissioner Brian Quintenz.

Judge Gordon is expected to rule soon on whether the NRA can officially join the case.