Hey all, Liam here. 

Just as prediction markets are hitting record volumes as college football kicks off in the US, a legal storm is brewing. 

And it risks derailing the future of the sector. 

On Friday, the Nevada Gaming Control Board filed an emergency motion to dissolve Kalshi’s ability to continue offering its events contracts — the term used to describe all the markets on the platform — in the state. 

The company received preliminary relief in April which effectively blocked Nevada gaming regulators from enforcing the state’s gaming laws on Kalshi. 

Judge Andrew P. Gordon, who oversaw the case, at that time reasoned that the event contracts the company offered counted as “swaps” or “contracts of a sale of a commodity for future delivery.” 

This meant they fell under the Commodities and Futures Trade Commission’s purview and not at the state level. 

But Gordon’s reasoning has completely changed in the span of six months. 

Now, he’s decided not to grant Crypto.com and its prediction market offering the same preliminary relief in Nevada on October 15. 

The discrepancy has opened quite an opportunity for those Nevada regulators taking aim at Kalshi.

“Kalshi’s event contracts have the same key features as Crypto.com’s event contracts,” the board’s filing from Friday reads. “They are wagers on the outcomes of sporting and other events — for example, whether a particular team will win a particular game.”

It’s not Kalshi’s only battle either. 

The company, which is now valued at $5 billion, has also had run-ins with litigation in Maryland, New Jersey, Ohio, Pennsylvania, and Massachusetts. 

In California, the Blue Lake Rancheria, Picayune Rancheria of the Chukchansi Indians, and Chicken Ranch Rancheria of Me-Wuk Indians filed a lawsuit against Kalshi and Robinhood for offering sports event contracts on tribal lands. 

Such an offering violates the 1988 Indian Gaming Regulatory Act, which gives native tribes the right to regulate gambling on their land. 

Ultimately, if Kalshi loses out, they’d be faced with landing costly approval on a state-by-state basis, which could hamstringing growth. 

The company isn’t backing down though. 

Naturally, they’ve refuted the development in Nevada on Monday and said that the “emergency motion” should only be used in rare occasions. 

Lots to play for here for sure.  

ICYMI

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• Bank of England’s £20,000 stablecoin cap sends ‘terrible signal’ to crypto, says Lord
  The central bank’s plan, which would limit individual stablecoin holdings to between £10,000 and £20,000, and business to $10 million, received fresh criticism in the House of Lords.

• Why Russia became the top European country for crypto adoption
  “Crypto assets are not just casually used in order to evade sanctions. There is a real strategy, a long-term strategy behind them,” Matthias Bauer-Langgartner, Chainalysis’ head of European policy, told DL News.

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