The Nevada Resort Association will be able to participate in the case involving federal prediction market provider KalshiEx LLC in a case that may hurt sports betting.
A U.S. District Court judge is allowing the Nevada Resort Association to intervene in a lawsuit filed by a New York-based federal prediction market against Nevada gaming regulators.
Meanwhile, a second prediction market has filed a similar lawsuit against regulators.
District Judge Andrew Gordon on Monday signed the order enabling the NRA to defend its members’ interests in KalshiEx LLC’s March 28 lawsuit against members of the Nevada Gaming Control Board and the Nevada Gaming Commission.
Kalshi began offering prediction contracts on sporting events nationwide late last year and the Control Board issued a cease-and-desist order to the company because its prediction contracts closely resembled a form of sports wagering and Kalshi is not licensed to take bets in Nevada.
Kalshi responded with the lawsuit and the judge ordered a temporary injunction preventing gaming regulators from pursuing legal action against Kalshi.
In Gordon’s Monday order, the judge wrote “NRA’s members have significantly protectable interests in their Nevada gaming licenses that they have spent substantial sums to obtain, maintain and protect.”
Kalshi responded that the NRA’s request to intervene was not filed in a timely manner, but Gordon said the NRA’s response 47 days after the lawsuit was filed was timely enough to grant the intervention.
In its motion to intervene, the NRA said 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. The organization predicted “seismic” changes in Nevada sports betting if Kalshi and other prediction markets are allowed to offer futures contracts on sporting events.
It hasn’t been determined how much tax revenue the state has lost as a result of Kalshi accepting contracts that presumably could have been bets taken by the state’s legal sportsbooks.
Judge’s reasoning
The judge’s order said, “If Kalshi prevails in this case, the NRA members likely would be placed at a considerable competitive disadvantage because Kalshi and others would not have to comply with Nevada’s comprehensive gaming laws, including prohibitions on bettors under 21 and types of bets allowed. The NRA members benefit from the well-regulated market of betting in Nevada and Kalshi’s efforts in this case could erode that market and the regulations that make it fair for the public and profitable for licensees.”
Kalshi contends that it can offer sports prediction contracts because it is regulated by a federal commission, the Commodity Futures Trading Commission, that it says has precedence over state gaming boards nationwide.
As a result, it believes it can offer contracts in California, Utah and other states that don’t have legalized sports betting in addition to the 39 states that allow it.
Nevada was the first state to issue a cease-and-desist order to Kalshi, but since then, six other states with legalized sports betting have tried to stop Kalshi and other markets that offer similar prediction contracts.
New lawsuit
The latest prediction market to become involved legally is North American Derivatives Exchange Inc., doing business as Crypto.com, which filed a lawsuit against members of the Gaming Control Board and Gaming Commission on Tuesday. The complaint names Gaming Control Board Chairman Kirk Hendrick, board members George Assad and Chandeni Sendall and Attorney General Aaron Ford as defendants.
Crypto.com’s lawsuit, also filed in U.S. District Court in Nevada, is similar to Kalshi’s because state gaming regulators issued a cease-and-desist order to that company dated May 20.
According to that letter, signed by Hendrick and addressed to Crypto.com CEO Travis McGhee and Crypto.com Chief Compliance Officer Kevin Dan, the company has until 5 p.m. Wednesday to cease operations in the state.
The Crypto.com lawsuit seeks preliminary and permanent injunctions to prevent the state from enforcing statutes that would block the company from operating in Nevada.
The case has been assigned to District Judge James Mahan.
