Kalshi argues that its event contracts provide traders with a hedge against market risks and are not gambling or betting products.
Prediction market platform Kalshi has filed a lawsuit against the Nevada Gaming Control Board and the New Jersey Division of Gaming Enforcement, following cease and desist orders from both regulators directing the company to halt all sports-related contracts within their states.
Kalshi’s legal team argued that the contracts fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC) and, therefore, cannot be regulated by state-level authorities.
The team also contends that the cease and desist orders fail to recognize that Kalshi’s event contracts are two-sided markets that trade as swaps as opposed to the sports-betting book model where the house controls the market. Kalshi co-founder Tarek Mansour said:
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