Calci has been temporarily banned in Nevada

It was everything It has been temporarily banned in Nevada, marking the latest escalation in the widening regulatory war on prediction markets. The 1st Judicial District Court of Nevada issued a 14-day restraining order, effective immediately, prohibiting the company from “offering a derivatives and prediction exchange market that offers contracts based on sports-related, election-related, and entertainment-related events” without first obtaining gaming licenses.

This may be the first time the company has had to cease operations in a US state. Massachusetts previously obtained a similar temporary injunction, but Calci was able to continue working there while the case was appealed. Kalci declined to comment.

This particular legal battle began a little over a year ago, when regulators in Nevada sent Calci a cease-and-desist letter demanding that it stop offering contracts for sports-related events. That set off a messy tug of war between plaintiffs and defendants as the case moved between state and federal court. For now, Calci can continue to operate in the state as its lawyers spar with authorities in what the company called a “judicial quagmire.”

After 14 days have passed, the court will then assess whether to extend the ban for the duration of the case before the court. “The expectation here is that the judge will turn the 14-day TRO into a long-term preliminary injunction,” says gaming attorney Daniel Wallach.

The ruling comes after a particularly tumultuous few weeks for Kelshi. On Tuesday, the Arizona Attorney General filed criminal charges against the company, accusing it of running an illegal gambling operation. Just days ago, Calci filed a lawsuit against Arizona regulators to preemptively challenge any effort to make it follow the state’s gambling laws.

Dozens of similar legal battles are taking place across the country over whether prediction markets should be forced to comply with state gambling laws, including in Ohio, Tennessee and Massachusetts.

A number of prominent prediction market platforms, including Kalshi, offer sports-related contracts to people over the age of 18 across the United States, even when state gambling laws prohibit sports betting. The result is that a 19-year-old in Utah can put his money on the outcome of a football game through prediction markets, but not through sports betting, as the state prohibits it outright. It also means that a 19-year-old in Indiana can make a prediction similar to a market bet, even though the state’s gambling law prohibits people under 21 from placing bets. This has angered a growing group of lawmakers from both Republican and Democratic parties.

Contracts for sports-related events — where, for example, someone can bet on which team will win the Super Bowl or a particular March Madness basketball game — are not a form of betting, Kalci says. Instead, the company says they should be viewed as financial instruments known as “swaps.” So far, the federal government has agreed to this. The Commodity Futures Trading Commission (CFTC), the US agency that oversees swaps and other financial derivatives markets, asserts that it has exclusive jurisdiction over prediction markets. The agency’s head, Michael Selig, strongly rejected claims that the industry should be subject to government gambling laws, telling critics he would see them “in court.”

The federal government’s position has not stopped several state attorneys and gaming commissions from continuing their legal battles, and they have recently scored some notable victories. In January, Nevada banned Polymarket from operating within the state; The temporary restraining order is in effect until April. It was a victory for the gamble side of the market, albeit a limited one: While Polymarket has a modest official presence in the US, the bulk of its trading volume takes place on its global exchange, which is technically banned in the US but available to traders willing to use virtual private networks (VPNs) to get around the ban.