Kalshi Opposes Nevada’s Discovery Demands in Federal Court Dispute
Kalshi is fighting Nevada’s attempt to obtain business records in their ongoing lawsuit. The case could decide whether federal regulation under the Commodity Exchange Act overrides state gambling laws.
Focus of the Legal Case
The dispute in Nevada asks if Kalshi, as a federally regulated Designated Contract Market overseen by the Commodity Futures Trading Commission (CFTC), must also follow state gambling laws. Kalshi insists the matter is strictly legal and does not require additional evidence.
Nevada wants access to a wide range of Kalshi’s information. This includes communications with the CFTC, marketing materials, and details of its contracts. Kalshi argues these requests go beyond the real issue and give the state an opening to examine its entire business.
Concerns Over Regulatory Authority
One of the state’s requests involves Kalshi’s exchanges with federal regulators. Kalshi views this as an indirect attempt to question the CFTC’s oversight. The company stresses that the dispute should focus only on whether state laws can block federally approved contracts.
Nevada doubts that discovery would hurt Kalshi, pointing to the firm’s $2 billion valuation. Kalshi counters that valuation has nothing to do with the burden of complying with broad discovery demands. The company says producing internal files would cause irreparable harm by exposing sensitive information.
Wider Legal Context
Kalshi has won preliminary injunctions in Nevada and New Jersey, allowing it to keep operating during litigation. It lost a similar request in Maryland, where the case has moved to appeal. All three lawsuits hinge on whether Kalshi’s event contracts, such as NFL proposition and point-spread bets, can be blocked by state laws despite federal approval.
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