Amid the legal turmoil, Kalshi was temporarily banned in Nevada

Kalshi is not having a very good week. On Tuesday, the Arizona Attorney General filed 20-count criminal complaint against the online prediction market, accusing it of running an illegal gambling business in the state. Now, another southwestern state has made a big move for the company: A judge in Nevada has temporarily banned the service from operating in the state as part of an ongoing lawsuit brought by state regulators.

Nevada, on behalf of the Gaming Control Board, He filed a lawsuit against Kalci in February In an attempt to prevent the forecasting site from operating in the state. Officials contend that Kalshi failed to obtain the proper state gaming licenses that would cover the type of betting activity its users engage in, and that by allowing users under the age of 21 to use its services, it is violating state law.

Earlier this month, the state requested a temporary restraining order against Kalci as part of her ongoing case. In state court on Friday, Judge Jason D. agreed. Woodbury agreed to the state’s request and scheduled a hearing on the restraining order for early next month. Court documents displays.

In his order, Woodbury wrote that Calci was not licensed under the Nevada Gaming Control Act, and that given Calci’s policy of taking a commission from contracts purchased through its system, it was clearly running a “percentage game” (defined by the state Known as gambling).

Calci has argued that because it is registered with the CFTC, it falls within that federal agency’s exclusive regulatory scope, which should exempt it from state laws, court documents show. However, Woodbury noted that the question of whether federal law trumps state law remains unsettled at the moment, but the courts have not leaned in that direction.

Kalci declined to comment on the development when contacted by TechCrunch. Wired Reported for the first time On the judge’s decision. Reuters Reports it The state of Nevada had previously convinced judges to ban Calci competitors like Coinbase and Polymarket.

The Nevada case that the prediction market finds itself in is just one of a growing number of state cases across the country seeking to argue that sites like Kalshi and Polymarket are illegal operations that circumvent the state’s gambling laws.

Conversely, current federal officials have positioned themselves as protectors of the forecasting industry. Case in point: In the wake of Arizona’s decision to file criminal charges against Calci earlier this week, CFTC Chairman Mike Selig came out swinging against the decision. Online publishing: “Today the Arizona Attorney General filed criminal charges against one of our registered exchanges related to prediction markets. This is a jurisdictional dispute and is completely inappropriate as a criminal prosecution. @Koftak “It is monitoring this closely and evaluating its options.”

The increasingly hostile stance of state officials and the leniency of the Commodity Futures Trading Commission (CFTC) have ensured a regulatory battle between states and the federal government over prediction markets and their future.