Nevada Takes Legal Action Against Kalshi for Sports Futures Contracts
Nevada has made history as the first state to take legal action against event-based sports futures contracts by sending a cease-and-desist letter to financial technology company Kalshi. The Nevada Gaming Control Board ordered Kalshi to stop offering event-based contracts on sports and election outcomes by March 14 or face criminal and civil penalties.
Although Kalshi did not immediately promise to comply with the order, CEO Tarek Mansour expressed disappointment at being “bogged down in infinite bureaucracy.” The company has stated its commitment to a regulation-first approach but has not explicitly stated whether it will follow Nevada’s demand.
The controversy surrounding sports event futures trading is currently under review by the federal Commodity Futures Trading Commission (CFTC), but states like Nevada are taking action as a next line of defense. Critics argue that sports event futures are akin to sports betting and should be treated as such.
Kalshi’s response to Nevada’s cease-and-desist order could set a precedent for how the company will deal with potential action from other states. Refusing to comply could lead to monetary fines or court injunctions to block trades. The Nevada Gaming Control Board faces its own challenges, as the chair is set to step down from his post this year.
Kalshi has a history of litigation, having previously sued the CFTC over election contract restrictions and winning the case in U.S. District Court. With uncertainties surrounding the future of sports event futures trading, the industry awaits further developments from both state and federal authorities.
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