Yigit Taha OZTURK 
Prediction market platform Kalshi has filed a lawsuit against gaming regulators in Nevada and New Jersey, arguing that its contracts are not gambling products but rather tools that provide traders with a hedge against market risks.
Kalshi: ‘Our Contracts Are Not Gambling’
The Nevada Gaming Control Board and the New Jersey Division of Gaming Enforcement had ordered Kalshi to halt all sports-related event contracts within their states. However, Kalshi’s legal team contends that these contracts fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC) and should not be regulated at the state level.
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Kalshi co-founder Tarek Mansour stated:
“Prediction markets are a critical innovation of the 21st century. Like all innovations, they are initially misunderstood. We are proud to be the company that pioneered this technology and stand ready to defend it in court.”
Additionally, the Nevada Gaming Control Board also issued a cease-and-desist order for Kalshi’s election contracts. However, a U.S. judge ruled them legal in September 2024, allowing these contracts to trade freely in the U.S.
CFTC Shifts Regulatory Approach
On February 4, CFTC Acting Director Caroline Pham announced that the regulator would pivot away from enforcement-based regulation and instead focus on fraud prevention:
“The CFTC is strengthening its enforcement program to focus on victims of fraud.”
This shift was welcomed by industry participants, especially following a wave of enforcement actions under the Biden administration.
Meanwhile, the CFTC launched an investigation into Super Bowl event contracts offered by Kalshi and Crypto.com. However, the regulator ultimately took no action to ban them.
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