In a significant development in the ongoing legal battle between prediction market operator KalshiEx LLC and Nevada gaming regulators, the Nevada Resort Association (NRA) has been granted permission to intervene in the lawsuit. The case, initially filed by Kalshi on March 28, 2025, challenges the Nevada Gaming Control Board (NGCB) and Nevada Gaming Commission over the state’s restrictions on sports betting and prediction contracts. This move has brought attention to the potential implications on Nevada’s highly regulated gaming industry, particularly regarding competition and tax revenue concerns.

Kalshi’s expansion into sports prediction markets:

Kalshi, a prediction market company regulated by the Commodity Futures Trading Commission (CFTC), began offering contracts on sporting events nationwide late in 2024. However, the Nevada Gaming Control Board quickly intervened, issuing a cease-and-desist order on March 4, 2025. The NGCB asserted that Kalshi’s prediction contracts, which resembled sports wagers, required licensing to operate within Nevada.

Kalshi responded with a lawsuit, arguing that as a federally regulated entity, the CFTC’s jurisdiction should take precedence over state laws, including those enforced by Nevada’s gaming authorities. The company sought a temporary restraining order to continue offering its services within the state.

In response, District Judge Andrew Gordon ruled in favor of Kalshi, granting the temporary injunction that allowed the company to maintain operations in Nevada while the legal proceedings continued. This ruling emphasized the complex issue of federal versus state jurisdiction, particularly in the emerging field of prediction markets.

The NRA, which represents 70 casino resorts in Nevada, expressed significant concern over Kalshi’s business model and its potential to undermine the state’s sports betting regulations. On June 2, 2025, Judge Gordon officially granted the NRA’s request to intervene in the lawsuit, citing the association’s vested interest in the case. The NRA argued that if Kalshi were allowed to operate freely, its members would face a competitive disadvantage, as they are bound by Nevada’s stringent gaming laws, which include age restrictions and specific betting types.

According to the NRA, Kalshi’s sports prediction contracts were functionally identical to sports bets offered by licensed casinos, yet the company operated without adhering to the same regulations. This, the NRA contends, represents an unfair advantage, particularly as Kalshi does not contribute to Nevada’s tax revenue in the same way that casinos do. The association warned that allowing Kalshi and similar companies to bypass Nevada’s gaming laws could lead to “seismic” shifts in the state’s sports betting market.

Broader implications for Nevada’s gaming industry:

The legal implications of this case extend far beyond the parties directly involved. Nevada’s legal sports betting market, which processed a staggering $7.8 billion in wagers in 2024, is a major driver of state revenue. If Kalshi and similar prediction markets are allowed to operate without the same regulatory oversight, it could result in significant revenue losses for both the state and licensed casino operators.

Judge Gordon’s order noted that if Kalshi were allowed to continue operating without adhering to Nevada’s gaming laws, NRA members would likely face an unlevel playing field. This would occur because Kalshi and other prediction market operators would not be subject to the same rules, such as prohibitions on bettors under 21 or limits on the types of bets allowed. The NRA warned that this could erode Nevada’s carefully regulated sports betting environment, which benefits both the public and operators.

While Nevada was the first to issue a cease-and-desist order to Kalshi, the company is now facing similar legal challenges from several other states with legalized sports betting. As reported by Las Vegas Review-Journal, in the wake of Nevada’s action, states like New Jersey, Maryland, and Illinois have also moved to restrict Kalshi’s operations. In fact, North American Derivatives Exchange, operating as Crypto.com, filed a lawsuit against the NGCB and Nevada Gaming Commission on June 3, 2025, challenging similar regulatory actions.

Despite these challenges, Kalshi has maintained that its prediction contracts are legally distinct from traditional sports betting and should be exempt from state-level gaming laws due to its federal CFTC regulation. The outcome of these cases could have far-reaching effects on the future of prediction markets and sports betting laws across the United States.