Kalshi, a financial exchange and prediction market platform, is seeking injunctive relief from cease-and-desist orders issued by the Nevada and New Jersey gaming boards. The Nevada Gaming Control Board ordered Kalshi to stop offering sports event contracts in the state by March 14, while the New Jersey Division of Gaming Enforcement issued a similar notice for the Garden State. Kalshi is fighting back against both states, arguing that federal regulations by the Commodity Futures Trading Commission (CFTC) should supersede state restrictions.
A lawsuit filed by Kalshi against Nevada alleges that the NGCB violated the Commodity Exchange Act by interfering with federally regulated activities. The company also faced allegations of violating New Jersey’s constitution by offering event trading on college sports, which is prohibited by state law. Despite efforts to educate the states on prediction markets and federal regulations, Kalshi’s CEO, Tarek Mansour, expressed frustration with the lack of understanding from Nevada and New Jersey.
The legal battle highlights the complexities of state and federal regulations in the evolving landscape of online prediction markets. While federal laws have changed regarding betting, state governments still hold authority over certain aspects, such as college sports betting. Kalshi’s stance on federal oversight and compliance with CFTC regulations underscores the broader debate over jurisdiction and the balance between state and federal control in the financial and gambling industries.
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