Nevada Cracks Down on Kalshi’s Election Trading Platform
Kalshi is facing a new regulatory challenge, but this time, in Nevada, as the state’s regulator has ordered it to cease trading on sporting events and elections.
LISTEN TO THIS ARTICLE:The Nevada Gaming Control Board issued a cease and desist letter to Kalshi on Tuesday March 14, mandating the company to stop all unlawful operations in the state by 5 p.m. on the same day.
Kalshi is a regulated exchange and prediction platform that allows users to buy and sell contracts based on the outcome of real-world events like the US presidential election and the Super Bowl.
Since prediction markets like Kalshi and Crypto.com function differently from conventional sportsbooks, they are not subject to the same state-by-state regulations and taxation laws that govern online sports betting platforms. Operators have long been wary of their presence, and those concerns have only intensified now that Kalshi has ventured into the sports sector.
In the C&D letter, the regulator noted that even licensed sports pools in Nevada are not allowed to take bets on elections, making Kalshi’s actions a “direct violation of Nevada’s public policy.”
Every sports pool in Nevada must undergo an extensive investigation prior to licensing, must adhere to strict regulation once licensed, and must pay all applicable taxes and fees. Any unlawful attempts to circumvent Nevada’s right to regulate gaming activity within its borders will be met with the full force of criminal and civil penalties.
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New Chapter in Kalshi’s Regulatory Struggles
This development marks the first time Kalshi will face a state-level challenge to its operations. It comes after its federal court victory over the Commodity Futures Trading Commission late last year.
Despite the win, Kalshi is still facing pressure from several entities in the federal scene. Lawmakers are considering a potential ban on election betting. The American Gaming Association, along with BetEx, GeoComply, and several tribal groups, has also been vocal in opposing prediction markets.
However, Kalshi’s relationships with high-profile supporters like President Trump and CFTC Chairman Brian Quintenz have strengthened its position. Earlier this year, the company appointed Donald Trump Jr., the eldest son of President Donald Trump, as a strategic advisor.
Responding to the letter, Kalshi CEO Tarek Mansour expressed his disappointment on social media platform X, stating that despite the setback, Kalshi will remain dedicated to its approach and “keep paving the way for regulated prediction markets to thrive in the US"
It remains to be seen whether Nevada's action will trigger a domino effect that will see more states challenging Kalshi's operations in the US.
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