Nevada Casinos Move to Join Federal Lawsuit vs. Kalshi

Nevada's big casino operators are looking to formally join a federal lawsuit against event-based prediction market firm Kalshi. 

The casinos, via the Nevada Resort Association (NRA), a trade group representing gaming giants like MGM Resorts International, Caesars Entertainment, and Wynn Resorts, filed a motion with the U.S. District Court to become an intervening party in the ongoing lawsuit.

Kalshi, a Commodity Futures Trading Commission-registered designated contract market, filed the suit in March after receiving a cease-and-desist letter from Nevada's Attorney General. Kalshi allows users to sell and purchase contracts depending on the outcome of real events, including political elections and sporting events, and offers users attractive Kalshi promo codes.

While the CFTC oversees the company, its sports contracts were self-certified, enabling them to bypass state regulation and licensing.

Nevada officials contend that Kalshi's sports contracts are unlawful under Nevada gaming laws and inconsistent with CFTC regulations prohibiting event contracts that resemble traditional gaming. The NRA is requesting to be joined as a co-defendant with the state to help defend Nevada's existing gaming regulatory structure.

The NRA argues that Kalshi's model poses a direct competitive threat to state-licensed sportsbooks. According to the association, Kalshi offers sports bets without meeting Nevada's rigorous licensing procedures, tax obligations, or regulatory controls.

This creates an uneven playing field for casino firms that must adhere to strict rules to maintain their game licenses.

NRA comments

In the petition, the NRA contended Kalshi's event contracts are no different from conventional sporting bets and do not require regulation as hedging instruments or financial derivatives. They disagree with Kalshi's argument that sporting events have significant economic repercussions deserving of financial trading.

The NRA believes that the underlying issue is that the state is not controlling Kalshi. They argue that allowing Kalshi to offer sports-based prediction markets without a Nevada gaming license could undermine the entire licensing regime.

Should Kalshi be permitted to legally operate in Nevada without complying with state gaming laws, the NRA warns that it would call into question the necessity and utility of gaming licenses for other operators. It would, in effect, create a contradictory legal framework whereby licensing by the state is both essential and unnecessary.

A federal court has already granted a temporary injunction preventing Nevada from enforcing its cease-and-desist order, allowing Kalshi to stay in business while the case continues. The NRA's motion to intervene in the lawsuit is meant to support Nevada's case and express the concerns of traditional gaming stakeholders.

Kalshi is facing the same pushback from other states. In April, a federal judge in New Jersey granted the company a preliminary injunction against the state Division of Gaming Enforcement. Kalshi has requested the same relief in Maryland, signaling a broader legal battle as it tries to introduce its event-based market products to the remainder of the U.S.