The Nevada Resort Association is trying to intervene in the Nevada Gaming Control Board’s legal fight against a prediction market that resembles sports wagering.
A U.S. District Court judge says he’ll move quickly to determine whether the Nevada Resort Association can intervene in a lawsuit filed by a New York-based prediction market that threatens to bring “seismic” changes to Nevada’s sports-betting industry.
Judge Andrew Gordon on Thursday took under advisement petitions from the NRA and from the Nevada Gaming Control Board on a lawsuit filed March 28 by KalshiEx LLC, a prediction market regulated by the federal Commodity Futures Trading Commission.
The Control Board on April 23 filed a motion to dismiss the Kalshi complaint but earlier this month, Gordon granted a temporary restraining order preventing the Control Board from shutting down Kalshi’s market in Nevada, which closely resembles a form of sports wagering.
When the NRA filed its motion to intervene on May 14, Gordon set a schedule for legal briefs with opposition from Kalshi due Thursday and any reply from NRA required by May 28.
The NRA believes it has a vested interest in the case because in 2024 Nevada’s legal sports-betting industry took $7.8 billion in sports bets and the NRA represents 70 casino resorts statewide.
‘Seismic’ changes
“The consequences from this litigation for the NRA’s members are seismic,” the NRA said in its legal filing.
“As a result of the court’s preliminary injunction order, today a Nevada citizen can open a Kalshi account and place $100 on the Vegas Golden Knights to win Game 5 of the playoff series against the Edmonton Oilers, returning a $180 prize if the Golden Knights prevail. The same Nevada citizen can go to a licensed and regulated sportsbook in Nevada and place $100 on the Vegas Golden Knights, returning the same prize of $180. And while Nevada receives tax revenue in the latter scenario, it receives nothing from the wager placed with Kalshi. There is no question that the event contracts offered by Kalshi are functionally identical to the sports bets offered by the members of the NRA.”
Representatives of the NRA and the Control Board had no estimate of how much tax revenue the state has lost as a result of Kalshi offering sports contracts this year.
Betting on elections
The state also is concerned about Kalshi offering prediction contracts on election outcomes. Nevada’s Constitution prohibits wagering on elections, yet Kalshi offered contracts on vote outcomes prior to November’s general election.
“Kalshi has repeatedly advertised itself on social media as offering ‘sports betting,’ the NRA’s court filing says. “Sample tags include: ‘The First Nationwide Legal Sports Betting Platform;’ ‘Betting on Kalshi, the first app for legal sports betting in all 50 states;’ and ‘Sports Betting Legal in all 50 States on Kalshi.’”
Kalshi’s argument for sports prediction markets is that it is regulated by a federal commission that has precedence over state gaming boards nationwide.
That means Kalshi believes it can offer its market in states that don’t have any form of legal sports betting, including California and Utah. New Jersey and Maryland, like Nevada, sent cease-and-desist orders to Kalshi, but they, too, were blocked in court.
The NRA’s filing said, “Kalshi concedes that it has referred to its offerings as bets, but notes that this is ‘hardly surprising and certainly not grounds for estoppel’ because companies and commentators ‘routinely refer to investments in financial markets in betting terms.’”
The NRA also is concerned that Kalshi and markets like it don’t have the experience to restrict underage participants, nor any programs addressing compulsive gambling disorders.
Accurate forecasts
Sports gambling legal expert I. Nelson Rose said he thinks there’s a place for prediction markets.
“Allowing people to trade event contracts, that is, make bets on future real-world events, has led to extraordinarily accurate forecasts,” Rose said in a recent blog post.
There are political elements involved in the Kalshi case, Rose said.
On Jan. 11, after his father was elected president, Donald Trump Jr., announced that he has become a paid strategic adviser to Kalshi.
Trump then appointed a new head of the CFTC, Brian Quintenz, who was a member of the board of Kalshi.
And Eliezer Mishory, Kalshi’s top lawyer, quit the company to lead the Department of Government Efficiency.
