Nevada and tribal regulators challenge Kalshi sports contracts legal status

State and tribal regulators in Nevada are challenging Kalshi over its sports contracts, disputing the firm's claim that its prediction market products qualify as financial swaps. ReadWrite reported that regulators argue the contracts must remain subject to gaming oversight. The challenges were raised during an Indian Gaming Association webinar. [1]

According to ReadWrite, Nevada Gaming Control Board Chairman Mike Dreitzer and tribal gaming advocate Jason Giles both objected to the swap classification used by prediction-market companies. Separate regulatory pressures are also escalating in other states, with DeFi Rate reporting that Michigan is seeking a contempt order against Kalshi over sports advertisements. [1][2]

As FTMQ Startups reported earlier, Kalshi has continued to offer sports contracts in New Jersey under a preliminary court injunction while state officials ask the United States Supreme Court to review local gambling law enforcement. The Commodity Futures Trading Commission proposed an amendment on Oct. 9 to classify event contracts as swaps. [3]

In Michigan, Coinbase Financial Markets previously agreed to wind down sports event contracts traded on Kalshi by closing open positions under an agreement with the Michigan Gaming Control Board, as FTMQ Startups reported earlier. Kalshi subsequently partnered with four tribes following the exit of Coinbase from Michigan sports contracts. [4]