Kalshi is suing the State of Missouri to prevent regulations on the company.
Kalshi is a prediction market that allows people to guess if a certain event will happen. Missouri Attorney General Catherine Hanaway issued a cease and desist order to Kalshi on offering sporting events on its platform. She said the company is running afoul of a constitutional amendment that has the state regulate sports betting.
Kalshi filed a lawsuit in federal court arguing that states like Missouri have no right to tell prediction markets what to do. Instead, Kalshi contends that it can only be regulated by a federal agency known as the Commodity Futures Trading Commission.
Applying Missouri's gambling laws to Kalshi, the lawsuit said, would "intrude on the field of exchange-traded derivatives that Congress has reserved entirely for the federal government."
"And it would force Kalshi to choose between violating federal law and facing criminal prosecution, forfeiture, and civil enforcement under state law," the lawsuit continues.
In a statement, Hanaway's office said the GOP official "will enforce the law, and we are confident the courts will not prevent her from doing so."
"If you are going to bet on the Chiefs beating the Broncos, the rules should be the same regardless of whether the bet is placed through an online prediction market or at the casino," Hanaway's statement said. "In both situations, it's sports betting — and Missourians voted to subject sports betting to licensing and taxation rules."
Kalshi has argued that it is fundamentally different from sportsbooks like FanDuel and DraftKings. Among other reasons, Kalshi doesn't make money when someone loses.
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