Kalshi’s claim to be a commodities trader is being rejected by courts
Kalshi is weathering multiple state court losses in its battle to remain regulated by the federal government as a trading, not betting, platform.
In a recent legal development, multiple US states have taken action against online prediction market Kalshi, rejecting its claim to be a commodities trader. A US District judge recently granted a preliminary injunction to California tribes, banning Kalshi from offering sports contracts on tribal land. The ruling was made against the backdrop of Kalshi's refusal to be classified within gaming law, arguing instead it was a trading platform.
This case was brought forth by the Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians, who alleged Kalshi's sports prediction trading violated the Indian Gaming Regulatory Act. The court determined that Kalshi's operations constituted Class III gaming, which includes sports betting and parimutuel wagering. Simultaneously, Arkansas Attorney General Tim Griffin announced the state's lawsuit against Kalshi under the Deceptive Trade Practices Act for alleged illegal gambling operations.
This came after Kalshi's sports prediction trading was ruled as gambling by state courts, including those in Ohio, Tennessee, Nevada, and New York. Kalshi, supported by the federal government and advised by Donald Trump Jr., maintains that its "swaps" are not bets and that it operates as a designated contract market trading in futures contracts and derivatives.
However, state courts have begun dismissing Kalshi's claims, leading to a series of countersuits from federal agencies like the CFTC.
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