Prediction Market Kalshi Will Win Battle With Nevada: Crypto Attorney
The post Prediction Market Kalshi Will Win Battle With Nevada: Crypto Attorney appeared on BitcoinEthereumNews.com.
The American legal tradition of federalism, balancing state authority with federal control, is being tested by a new frontier: online prediction markets. At the center of everything is Donald Trump Jr., advised Kalshi. Nevada and New Jersey have issued cease-and-desist orders against Kalshi over the prediction market’s sports contracts, claiming they violate state gambling laws. But Kalshi has hit back, arguing that what it offers isn’t gambling and that it’s regulated by the Commodity Futures Trading Commission and the Commodities Exchange Act as it is a prediction market, not a gambling venue – an argument that crypto attorney Aaron Brogan says should be an easy win in court. “I think clearly Kalshi is going to win these cases,” Brogan said in an interview with CoinDesk. “If you look at the language of the Commodity Exchange Act (CEA), it says that the CFTC has exclusive jurisdiction over any contracts that fall within its regulatory purview, which derivative contracts and event contracts clearly do.” Prediction markets like Kalshi and Polymarket operate as neutral intermediaries, matching orders just like any other exchange under CFTC purview. There’s no sportsbook with a prediction market; the operator of the market doesn’t bet against its users. For prediction market operators, sports has been a significant growth area. Data from Polymarket Analytics shows the category has surpassed the 2024 election for volume. “[Kalshi is] not taking a side of the bet as the market in that case, which fundamentally changes the incentives involved and makes the product different in a holistic way,” Brogan explained. Kalshi has self-certified these event contracts with the CFTC, a process allowing federally regulated derivatives exchanges to list new products by attesting their compliance with regulatory requirements without needing explicit pre-approval from the agency. For its part, the CFTC seems to be receptive to…
Filed under: News - @ April 9, 2025 5:23 pm