Kalshi has filed lawsuits against New Jersey and Nevada after being ordered to halt operations of its sports prediction markets related to March Madness. Both states view these prediction markets as unlicensed sports betting, but Kalshi argues they are legitimate financial products regulated by the Commodity Futures Trading Commission. Kalshi, along with Robinhood, which partnered with them, believes that state regulators misunderstand the nature of prediction markets and stifle innovation. The ongoing legal battle coincides with the key moments of the March Madness tournament, heightening the stakes for the company.
Both states have issued cease and desist orders that fundamentally misunderstand prediction markets and undermine the foundation of U.S. financial markets, which are regulated by the federal government.
I can't speak to why they are taking this action, but prediction markets have proven their use, so it is a shame that these authorities are still trying to censor them.
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