Nevada gaming regulators and casino operators are engaged in a legal fight against Kalshi, a federally regulated prediction market that recently began offering sports-related contracts. The platform, which allows users to bet yes-or-no on outcomes like who will win a game, operates under the oversight of the Commodity Futures Trading Commission (CFTC) and claims it falls outside state gambling laws.
Regulators and Casinos Push Back Against Prediction Market Expansion
But Nevada disagrees. In March, the Nevada Gaming Control Board issued Kalshi a cease-and-desist letter, asserting that its contracts amounted to unlicensed sports betting. Kalshi fired back with a lawsuit, and a federal judge has temporarily blocked enforcement of the state’s order while allowing the case to proceed.
Kalshi’s sports contracts have gained attention quickly. More than $21 million was invested in bets for the opening game of the NBA Finals, and the company has facilitated over $240 million in NBA contracts this year, earning $4.8 million in fees. But because Kalshi collects a transaction fee instead of setting odds or profiting from losses, the company argues its model is not traditional gambling.
“[Sports] is a new asset class that never traditionally existed,” said Sara Slane, Kalshi’s head of corporate development. “We don’t win by players losing, and we don’t lose by players winning, unlike a sportsbook.”
Industry Warns of Competitive and Legal Risks
Nevada’s Resort Association, which includes major casino brands like MGM Resorts and Boyd Gaming, has joined the lawsuit. U.S. District Judge Andrew Gordon noted these operators could be at a “considerable competitive disadvantage” if Kalshi avoids state regulation.
Gaming industry consultant Brendan Bussmann warned Kalshi’s model “is gaming masked as a predictive outcome,” and could undermine revenues for states, tribal nations, and legal sportsbooks.
Since Kalshi isn’t subject to state taxes or oversight, critics say the platform threatens billions in legal gaming revenue. Nevada sportsbooks alone saw $7.8 billion in wagers in 2024, generating $482 million in taxed revenue.
National Pushback From Sports Leagues and Lawmakers
Kalshi has also received cease-and-desist notices from eight other states. In Washington, D.C., the American Gaming Association (AGA) told the CFTC that Kalshi “severely undermines state regulatory authority while also jeopardizing state tax revenue.”
Major League Baseball and the NBA criticized Kalshi for not following standard integrity procedures required of sportsbooks. Rep. Dina Titus (D-Nevada) called the company a “backdoor way to legalize sports betting in states that have not authorized it.”
Big Operators Stay Cautious – For Now
While Kalshi defends its model, larger sportsbooks are watching closely. DraftKings CEO Jason Robins suggested some states might use Kalshi’s model to sidestep regulated betting. FanDuel’s parent company, Flutter Entertainment, sees it as a learning opportunity for expanding its Betfair Exchange product.
Kalshi CEO Tarek Mansour remains firm that the business should not be treated like gambling. “If we are gambling, then I think you’re basically calling the entire financial market gambling,” he said.
Source:
“Why Nevada gaming regulators are on the warpath against sports prediction platform Kalshi”, thenevadaindependent.com Jun 8, 2025
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