Could Kalshi’s Nevada victory collapse due to the Wire Act?

Source: Shutterstock

Reporting in Forbes yesterday raised questions around the legality of online prediction platform Kalshi’s sports prediction markets under the Wire Act.

The law prohibits transmitting any wagering information related to sporting event contests across state lines, but Kalshi is a national operation.

Article continues below ad

Last month the prediction platform was sent a cease-and-desist by the Nevada Gaming Control Board but was granted an early win during its lawsuit against the states of Nevada and New Jersey after a federal judge deemed that Kalshi could continue operating in Nevada until the lawsuit was settled.

Forbes pointed out that the Nevada Attorney General did not mention the Wire Act during the lawsuit, but has until April 23rd to file an official response to Kalshi’s complaint, which could then be used to raise the issue of the Wire Act.

Kalshi’s sports trading contracts directly go against the terms of the act, even though Kalshi describes itself as a non-gambling product that allows users to financially exchange contracts with other traders. In Kalshi’s terms it is not sports gambling as its platform does not offer ‘against the house’ bets.

Although the Wire Act does not distinguish between exchange markets and bookmakers, lawyer and Forbes contributor Daniel Wallach believes Nevada still has legal scope to enforce its gaming laws against Kalshi, and other prediction markets.