Nevada Regulators Demand Internal Files from Kalshi
Nevada state regulators have escalated their legal dispute with prediction market Kalshi by filing a motion to compel discovery. This formal request aims to force Kalshi to release key internal documents and communications related to its federally approved contracts.
State Seeks Evidence on Contract Certification
The motion was filed by the state defendants, including Nevada Gaming Control Board Chairman Kirk D. Hendrick and Nevada Attorney General Aaron D. Ford. Regulators argue they need this material to respond to Kalshi’s pending motion for summary judgment in the ongoing lawsuit.
Nevada is demanding three specific categories of information that Kalshi has refused to provide:
- Federal Certification – documents and internal communications detailing Kalshi’s self-certification of event contracts to the federal Commodity Futures Trading Commission (CFTC).
- Economic Impact – documents discussing any financial, commercial, or economic consequences of Kalshi’s event contracts. This goes to the heart of whether the contracts qualify as swaps under federal law.
- Compliance Conflict – documents discussing Kalshi’s claim that complying with Nevada law interferes with the operation of its markets.
The state argues that Kalshi’s internal discussions are “highly relevant” and necessary to understand whether the company internally viewed its contracts as legitimate risk-mitigation tools or as forms of gambling.
Broader Regulatory Crackdown Continues
Nevada’s action against Kalshi is part of a recent tightening of legal action against the prediction market sector.
In a related case, Nevada recently secured a victory against Crypto.com. A Nevada judge, Andrew Gordon, refused the company’s request for an injunction that would have allowed it to continue offering certain sporting betting lines.
Judge Gordon justified his ruling by distinguishing between a tradable event and a wagering outcome. “Crypto’s contracts clearly refer to the outcome,” the judge stated, adding, “I view an outcome as something other than an event.”
In the Kalshi case, state defendants claim Kalshi has waived many of its objections by using standard, vague arguments without providing supporting evidence of undue burden.
Nevada has requested the court order Kalshi to cover the state’s attorneys’ fees and costs for having to file the motion to compel. If the court grants the motion, the documents could either confirm Kalshi’s federal preemption argument or provide the state with evidence to support its claim of jurisdictional authority over the contracts.
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