Control Board member Assad to Kalshi: ‘The gig is up’

Board member George Assad, a retired Las Vegas Municipal Court judge, said companies like KalshiEx LLC and Crypto.com that have written contracts on sports outcomes that are similar to sports bets won’t be tolerated in the state and that recent judicial rulings are starting to acknowledge that.

“These judges are starting to wake up and they’re starting to see that this word salad that they’ve been producing is nothing more than a word salad,” Assad said during a public comment portion of Wednesday’s Control Board agenda.

“A derivative contract, whatever you want to call it, is nothing more than a sports wager,” he said. “A sports wager is a sports wager. Every bet made in this town is a contract. You can call it a derivative contract. You can call it a credit default swap like they did during the housing bubble. Whatever you want to call it, it’s still a sports bet. Therefore, it’s under the jurisdiction of the Nevada Gaming Commission and Nevada Gaming Control Board.”

Assad was referring to U.S. District Court Judge Andrew Gordon’s ruling last week that denied Crypto.com a preliminary injunction allowing the company to continue to write sports contracts while the case proceeded in court.

The ruling was surprising because Gordon approved a similar request from Kalshi earlier this year.

Kalshi sued the Control Board in March after regulators issued a cease-and-desist order demanding that the company quit offering contracts in Nevada.

It argues that the federally regulated Commodity Futures Trading Commission oversees derivative contracts, while states say they are charged with regulating sports wagering. Kalshi has marketed its products as sports betting and offers it in all states, including those that don’t allow gambling.

The Kalshi case is expected to be heard in court in Nevada in December.

Judges in other states have addressed the issue differently in the past few months. A New Jersey court approved a temporary injunction, but a Maryland judge denied it. The dispute has also been raised in Massachusetts and Ohio.

“The recent decision by the judge in Maryland (Adam Abelson) made it crystal clear, that the federal government does not have exclusive jurisdiction in this field, that states have a right to control, as they have traditionally done, the gambling in their state,” Assad said. “And then these people like Kalshi and Crypto want to come in and impose their will on sovereign nations like the Indian tribes, which is outrageous, and on states like California, Texas, Utah and others, who don’t want gambling at all.

“And then they want to impose their will on Nevada when we want to protect 18- and 19-year-old kids from becoming possibly addicted to gambling at a young age where the immaturity level is not sufficient enough to know how to treat gambling. We’re putting a stop to this.”

Assad added that he hopes the states’ attorneys can recapture “ill-gotten gains” from the companies that have profited from their sports prediction contracts.

Representatives from the prediction market companies have not responded to requests for comment.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.