Nevada has turned Kalshi's own argument against it in the Ninth Circuit appeal. The prediction market operator cited North Carolina's new tax as proof that states can levy charges without interfering with federal oversight. Nevada says that claim undermines the company's entire position.
In August Kalshi pointed to Senate Bill 257 from North Carolina, which imposes a 6% tax on net operator commissions from prediction market trades in the state. The law requires no licensing or supervision, allowing platforms registered with the CFTC to operate. Kalshi argued states can tax but not regulate trading on federal exchanges.
Nevada rejected the distinction. Taxation is itself a form of regulation, the state says. 'By citing S.B. 257, Kalshi concedes that the state has the right to regulate its operations. This is a stunning reversal,' the filing states. Nevada added that if Kalshi accepts North Carolina's tax, it cannot challenge Nevada's own tax requirements.
The case is part of a consolidated appeal by Kalshi, Crypto.com and Robinhood, all contesting Nevada's application of gambling law to sports event contracts. Oral arguments took place in April. One judge called the distinction between prediction markets and betting 'sophistry to the nth degree'. The decision may determine the fate of sports prediction markets in the US. While the appeal proceeds, Kalshi remains blocked from sports contracts in Nevada.
