Nevada Resort Association allowed to intervene in Kalshi lawsuit against gaming regulators

A U.S. District Court judge has permitted the Nevada Resort Association (NRA) to intervene in a lawsuit brought by New York-based prediction market Kalshi against Nevada gaming regulators, escalating a legal battle over the scope of sports betting in the state.

The ruling, issued Monday by U.S. District Judge Andrew Gordon, allows the NRA to defend the interests of its 70 casino resort members, who say they face a competitive threat from Kalshi’s federally regulated prediction contracts.

Kalshi, which began offering sports prediction contracts across the U.S. in late 2024, filed a suit on March 28 after the Nevada Gaming Control Board issued a cease-and-desist order. The regulators argued that Kalshi’s contracts were effectively unlicensed sports wagers under state law. Gordon later granted a temporary injunction blocking enforcement actions against Kalshi while the case proceeds.

In his order, Gordon wrote: “NRA’s members have significantly protectable interests in their Nevada gaming licenses that they have spent substantial sums to obtain, maintain, and protect.” He rejected Kalshi’s argument that the NRA’s intervention was untimely, noting the group filed its request 47 days after the suit was lodged.

Kalshi claims its operations fall under the jurisdiction of the federal Commodity Futures Trading Commission (CFTC), which it argues preempts state regulation and allows it to offer contracts even in states that prohibit sports betting. Kalshi's position has drawn pushback from several states, with six others besides Nevada having taken enforcement action against similar offerings.

The NRA contends that Kalshi's entry into Nevada could destabilize the state’s regulated sports betting industry, which handled $7.8 billion in wagers in 2024. The organization warned in court filings of “seismic” disruptions if unlicensed prediction markets were permitted to operate outside state gaming laws.

“If Kalshi prevails in this case, the NRA members likely would be placed at a considerable competitive disadvantage because Kalshi and others would not have to comply with Nevada’s comprehensive gaming laws, including prohibitions on bettors under 21 and types of bets allowed,” Gordon wrote. “The NRA members benefit from the well-regulated market of betting in Nevada, and Kalshi’s efforts in this case could erode that market and the regulations that make it fair for the public and profitable for licensees.” 

In a related development, another prediction market, North American Derivatives Exchange Inc., operating as Crypto.com, filed a separate federal lawsuit on Tuesday against Nevada regulators after receiving a cease-and-desist order dated May 20. That suit, assigned to U.S. District Judge James Mahan, seeks to block the state from enforcing regulations that would bar the company from offering prediction contracts in Nevada.

Defendants in the Crypto.com case include Gaming Control Board Chairman Kirk Hendrick, board members George Assad and Chandeni Sendall, and Nevada Attorney General Aaron Ford.

The outcome of the Kalshi and Crypto.com lawsuits could have broad implications for how prediction markets are regulated at both the federal and state levels, particularly in jurisdictions where sports betting is tightly controlled or prohibited.