In the Nevada Gaming Control Board’s lawsuit against Kalshi, a federally regulated San Francisco-based company that facilitates peer-to-peer wagers on the outcomes of future events, the agency complains that the company offers a “gambling game” that “allows users to wager on the outcome of sporting events and other events for which the outcome is uncertain.”
The state of Nevada — obviously home to the largest gambling industry in the United States — wanted to ban the company and some other similar firms to protect Nevadans from the ill effects of gambling. The often-wrongheaded 9th Circuit Court of Appeals agreed that Kalshi’s sports bets do not qualify as a “swap” under federal law and allowed the state to institute its ban, even though the Commodity Futures Trading Commission considers them as such. Nevada is one of nine states that have banned or tightly restricted access to the platform.
This, of course, brings to mind Captain Louis Renault’s famous quotation from “Casablanca” before he was handed his winnings at Rick’s casino: “I’m shocked, shocked to find that gambling is going on in here.” Nevada officials insist their action is purely about protecting the public from unregulated gambling, but it’s an obvious effort to protect from competition the state’s political powerful hometown industry, with its paltry odds for players. By the way, Kalshi is indeed regulated by the feds.
Casinos.com offered a recent analysis that likely explains the Silver State’s actions: “As of early 2026, prediction markets have overtaken traditional online gambling in 30 states. That’s not a trend anymore. It’s a takeover.” And prediction markets could prove an existential threat: “The house edge was never a secret. It’s a mathematical guarantee that, given enough time, the casino wins. For decades, that was simply the cost of playing. But a new breed of speculator isn’t willing to pay it anymore.”
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