Nevada sues Kalshi for operating a sports gambling market without a license

Nevada has sued Kalshi, a prediction market company, for operating a sports gambling market without the necessary licenses in the state. The lawsuit alleges that Kalshi also provides services to individuals under the legal gambling age of 21, violating state law. The lawsuit follows a federal appeals court's rejection of Kalshi's request to prevent Nevada from taking legal action. The Trump administration has claimed that only the federal government has the right to enforce the prediction market industry. Prediction markets, which allow users to bet on events like sports, politics, and wars, have seen a surge in popularity. However, their growth has come at the expense of regulated gambling in Nevada. The state's gambling regulators say Kalshi has "continued to dramatically expand its business" rather than maintaining the status quo. Kalshi and its rival Polymarket argue that their businesses should be regulated as financial investments rather than gambling. The Chair of the Commodity Futures Trading Commission (CFTC) has filed an amicus brief, claiming the CFTC has exclusive jurisdiction over these markets. The prediction market industry has also faced concerns about potential insider trading, with a small number of accounts capturing a significant portion of the profits on these platforms.