Nevada Bans Kalshi for at Least the Next Two Weeks
A court in Nevada has issued a restraining order against Kalshi that prohibits the online prediction market from operating in the state, according to a new report from Wired. The order lasts 14 days and means that Kalshi can’t let people in Nevada bet on anything for at least the next two weeks, starting today. Nevada is the first state to have completely halted operations for Kalshi, according to Wired, but the company has faced growing legal pressure in other states recently. Arizona, for instance, charged Kalshi with operating an illegal gaming business in the state this week.
The Nevada Gaming Control Board first started its fight against Kalshi over a year ago and argues the company shouldn’t be allowed to operate in the state because it pays no gaming taxes, has no gaming license, and has no physical location in Nevada. Kalshi declined to comment in an email to Gizmodo on Friday afternoon. State court judge Julie Harkleroad in Carson City signed the order Friday, according to Bloomberg, which blocks contracts for anything involving sports, elections, and entertainment. Kalshi is currently raising about $1 billion in a new round of financing that values the company at $22 billion, according to the Wall Street Journal.
Las Vegas, Nevada, has been walloped by a tourism slowdown in recent months, driven by a cooling economy and America’s declining reputation for human rights globally, which has scared away international visitors. Needless to say, people traveling from overseas don’t like the idea of getting picked up by ICE. And the gambling industry seems to be pulling every lever it can to entice visitors, both domestic and international, while keeping out competition from online betting.
In January, the Las Vegas strip saw an 11% drop from a year earlier, according to the Las Vegas Review-Journal, and international travel to the U.S. was down 4.8 percent in January, the ninth straight month of decline in the number of visitors. The benefit of Kalshi compared to a trip to Vegas is obvious. Anyone can do it from the comfort of their phone rather than traveling to pay for other expenses you’d typically incur during a vacation, including hotels and meals away from home.
The lawsuit against Kalshi cites an infamous appearance by CEO Tarek Mounsor on CNBC last month, during which he said insider trading was “banned” but provided no clarity on the actual definition of insider trading. The legal fight is expected to be “protracted,” as the Nevada Current recently put it. The next hearing in the Kalshi case is set for April 3.
