Kalshi has filed a lawsuit against the gaming regulators in Nevada to continue providing event contracts for betting on sports and politics, creating a conflict between state and federal regulatory authorities.

Kalshi argues that, as a federally regulated derivatives exchange overseen by the US Commodity Futures Trading Commission, it falls under federal jurisdiction to determine the types of wagers it can offer. However, Nevada’s regulators insist that Kalshi’s contracts violate the state's rules governing licensed, inspected, and taxed sports pools.

The Nevada Gaming Control Board had warned Kalshi of penalties if it proceeded to offer contracts that bypassed the state’s regulatory authority over gaming activities within its borders. Kalshi, on the other hand, claims in its lawsuit that Nevada cannot enforce its gambling laws against the firm since it is federally regulated by the CFTC.

Kalshi’s event contracts enable people to place bets on a range of events, such as predicting Oscar winners or the Federal Reserve Board's interest rate decisions. Despite their attempts to resolve the legality of their contracts with Nevada, Kalshi seeks the court's acknowledgment that Nevada's enforcement of gambling laws infringes upon the federal regulatory framework mandated by Congress for futures derivatives trading on designated exchanges.

The Nevada Gaming Control Board and the Nevada Gaming Commission have not yet responded to requests for comment regarding the lawsuit. Kalshi began offering sports betting markets in January and the legal case is recorded as KalshiEX, LLC v. Hendrick et al, 25-cv-00575, in the US District Court of Nevada (Las Vegas).