A judge has ruled against Kalshi in a preliminary ruling, the first significant court roadblock as the prediction market looks to continue offering sports event contracts in all 50 states.
Maryland federal district judge Adam Abelson denied Kalshi’s motion for a preliminary injunction against the state’s sports betting regulators in a ruling filed Friday. Abelson wrote that Kalshi “failed to show a likelihood of success” in its lawsuit against the Maryland Lottery and Gaming Control Commission.
The decision is the first major legal setback for Kalshi after courts in Nevada and New Jersey had ruled in its favor.
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The operator has argued publicly and in court that its sports platform, which allows users to purchase event contracts on the outcome of sporting events, is not sports betting.
Gaming regulators in more than a dozen states have sent cease-and-desist letters to Kalshi and other prediction markets, arguing these contracts are an illegal form of gambling.
Kalshi responded with lawsuits against regulators in multiple states. In Nevada and New Jersey, judges ruled that Kalshi is subject to federal, not state, regulations and therefore not subject to regulators’ purview. Kalshi has continued offering event contracts in these states.
Friday’s ruling in Maryland presents the first major stumbling block.
Kalshi will likely continue operating in Maryland as it continues its lawsuits and readies potential appeals, but it adds new questions to the legality and future of US prediction markets.
Legal analysts believe this legal battle will be pursued until it reaches the Supreme Court, a potentially multi-year court fight that could alter American gambling.
This is a developing story...
