Nevada Attorney General Aaron Ford has filed a Massachusetts Superior Court decision in the Ninth Circuit Court of Appeals as “supplemental authority” after the Court granted a preliminary injunction order against Kalshi.
A federal judge in Nevada previously dissolved a preliminary injunction which allowed Kalshi to offer sports-related prediction markets in the state, while the Massachusetts order forbids the operator from providing such contracts without a license.
Ford argued the ruling "bears on Kalshi's pending motion for an injunction pending appeal in two ways” as part of the filing issued to Circuit Court Clerk Molly Dwyer.
"First, the decision confirms that Kalshi is not likely to succeed on the merits. Like the district court in this case, the Massachusetts court held that the Commodity Exchange Act (CEA) does not preempt state gaming law,” Ford said.
“The Massachusetts court explained that nothing in the CEA ‘establish(es) that Congress clearly and manifestly intended to strip states of their authority to regulate gaming if the company offering such wagering opportunities has been approved to sponsor a (DCM) for commodities trading.”
Nowhere to turn
Kalshi’s legal battles have extended further than just Nevada and Massachusetts, as the operator is currently engaged with state regulators and lawmakers in New York, Tennessee, Maryland and Wisconsin.
Ford continued: "Second, the decision confirms that the balance of equities weighs against Kalshi. Like the district court in this case, the Massachusetts court found that any harm Kalshi claims is ‘of its own making,’ because Kalshi ‘knowingly proceeded in Massachusetts and other states that require sports wagering to be licensed, even after the CFTC warned it to be cautious.’
“At the same time, the court determined, Massachusetts gaming law serves important ‘public health and safety’ interests and ‘the Commonwealth's financial interest,’ while also ensuring ‘fair competition and equal oversight’ of sports betting.
"More generally, the Massachusetts decision supports denial of the motion here, because it confirms that a state enforcement proceeding is not an irreparable injury, and that ‘compliance with a preliminary injunction’ poses no ‘unusual degree of hardship for Kalshi to overcome’ and will not be ‘fatal to its business.’”
Dueling difficulties in Nevada
In related news, the Nevada Gaming Control Board (NGCB) filed a civil enforcement action against Polymarket in Carson City District Court on January 16, as well as the prediction market operator’s technology platform Blockratize.
Within its complaint, the NGCB asked the court for a declaration and injunction which would prohibit Polymarket from offering “unlicensed wagering” in violation of state law.
Given Polymarket has yet to be approved for Nevada licensing, the NGCB considers the prediction market operator’s services to be unlawful in the state and in violation of multiple legislative codes.
Kalshi announced the appointment of Blake Bee to the role of Director of State Government Relations on January 20, having previously served as Senior Manager of Public Policy for Amazon
