Lawyer In Kalshi Lawsuit Used To Be New Jersey Attorney General
Gurbir Grewal is now representing the prediction markets platform. Included in today's post: Copies of the filings from Kalshi's cases against NJ, Nevada.
Before we get into today’s post, a bit of housekeeping: After I sent four newsletters last week, you probably knew this was coming. I am going to try to post something almost every weekday as my time allows and events warrant. The Closing Bell, a wrap-up of the week in prediction markets news, will now publish on Fridays instead of Thursdays.
One of the lawyers in Kalshi’s lawsuit against the New Jersey Department of Gaming Enforcement was once the state’s attorney general.
Gurbir Grewal is representing Kalshi as it fights a cease-and-desist order from NJ for allegedly offering illegal sports betting; Grewal served as NJ’s AG from 2018 to 2021.
Grewal appears as one of the lawyers for the prediction market platform in its complaint in federal court against the NJDGE. Grewal is a partner at Milbank LLP.
Kalshi has also requested a temporary restraining order against NJDGE in a lawsuit brought on Friday. The company faces a similar C&D in Nevada, where it also filed a lawsuit on Friday.
In between his stint as NJ AG and his role at Milbank, Grewal was the Director of the Division of Enforcement for the Securities and Exchange Commission from July 2021 until October 2024.
Grewal as NJ AG on gaming issues
Grewal’s participation in the Kalshi case is particularly interesting given his history of attempting to protect New Jersey’s online gambling industry from federal intrusion during his time in office.
In 2019, Grewal filed an amicus brief on behalf of New Jersey in a federal case about the Department of Justice’s reinterpretation of the Wire Act that threatened to make state-regulated online gambling — like online casinos and lotteries — illegal.
More here from a press release at the time:
Continuing to fight for New Jersey’s online gaming industry against the latest Trump Administration efforts to shut it down, Attorney General Gurbir S. Grewal today filed a brief explaining to a federal court of appeals why federal law permits most forms of online wagering.
“I was proud to help lead the successful fight for the future of New Jersey’s online gaming industry against the Department of Justice, and I’m committed to defending our victory on appeal,” said Attorney General Grewal. “Lawful online gaming is both effectively regulated in New Jersey and vital to the economic well-being of Atlantic City and our state. DOJ was right to promise in 2011 that online gaming was perfectly legal, and New Jersey staked a significant part of its economic future to that promise. We’re going to keep pushing back against the politically-driven reinterpretation.”
…
The amicus brief filed by Attorney General Grewal yesterday, marks just one of a series of actions he has taken to protect New Jersey’s internet gaming industry following the DOJ’s 2018 reinterpretation, which have also included suing for public records under FOIA related to the likelihood that DOJ’s decision to reinterpret the federal Wire Act was driven by Sheldon Adelson and his lobbyists.
In 2021, Grewal signed a letter from a number of state attorneys general to the DOJ on the Wire Act issue:
We, the undersigned State Attorneys General, are seeking clarity and finality from the Department of Justice regarding its interpretation of the Wire Act, 18 U.S.C.
§ 1084. As you may be aware, 25 State Attorneys General wrote to your predecessors on March 21, 2019 to express our strong objection to the Office of Legal Counsel’s (OLC’s) Opinion “Reconsidering Whether the Wire Act Applies to Non- Sports Gambling.” …
Unfortunately, in late 2018 the Department drastically altered its interpretation of the Wire Act. Without seeking input from state governments and without a formal request to do so, the Department adopted this new reading in its Opinion, which issued in 2018 and was published in 2019. …
Thus, with the stroke of a pen, the Department suddenly declared that state- operated online platforms—which support schools, services for senior citizens, first responders, infrastructure projects, and other critical fiscal needs—were part of a criminal enterprise.
You can read that letter here:
And more from an accompanying press release in New Jersey:
Noting that President Biden has publicly disagreed with the Trump-era DOJ opinion and vowed in 2019 to reverse it if he became president, the letter asks DOJ to now provide “clarity and finality,” because “states and the industry need to understand what their rights are under the law without having to file suit in every federal circuit.”
“It’s time for DOJ to lift the fog of ambiguity surrounding this important national issue, do the right thing and rescind the opinion it issued in 2018,” said Attorney General Grewal. “We maintained from the start that the Trump-era Wire Act ‘reinterpretation’ was politically-motivated and wrong on the law, and we’re proud to now join with our fellow states in calling for its official elimination.”
Kalshi filings in federal court
If you are interested in reading Kalshi’s legal arguments, or just for having them for reference, here are the filings from Kalshi in federal court:
New Jersey
Nevada