Events predictions operator Kalshi is going to have its day in court against state gaming regulators that have banned events predictions markets in their jurisdictions. Late last week, Kalshi filed lawsuits against the the Nevada Gaming Control Board (NGCB) and the New Jersey Division of Gamine Enforcement (DGE) Gaming Control Board (NGCB) and the New Jersey Division of Gamine Enforcement (DGE) claiming that neither group had the authority to keep the events prediction firm out of their market. Kalshi also alleges that their right to offer event contracts is protected by federal law.
The lawsuit is a major event in the battle between events predictions markets and state regulators who claim the industry is merely a cover for offering unregulated sports betting. Kalshi’s legal team is digging into the divide between the authority of the states and the authority of the federal government. Their argument is that only Congress can regulate interstate commerce and that their business should be regulated by the Commodities Futures Trading Commission (CFTC). By chance, the incoming head of that agency,Brian Quintenz, is a Kalshi board member and good friend of the current US President’s oldest son.
Kalshi CEO Tarek Mansour sounded confident in comments reported on by Bloomberg saying, “We have been targeted before, we have fought before, and we have won before. This time will be no different. The threatened actions in Nevada and New Jersey seek to undermine not just Kalshi’s contracts, but the authority granted by Congress to the Commodity Futures Trading Commission, which has safely and effectively governed commodities markets for decades.“