Control Board warns gaming companies to avoid prediction markets
The Nevada Gaming Control Board is telling gaming operators their licenses could be at risk if they collaborate with companies offering prediction market contracts.
Board Chairman Mike Dreitzer on Wednesday issued a two-page industry notice titled “Sports Event Contracts are Wagers” that explains Nevada regulators’ position on prediction markets such as KalshiEx LLC, Crypto.com and Robinhood.
It was the second strong warning issued by regulators in a week. At the Control Board’s Oct. 8 meeting, board member George Assad applauded a recent court ruling against Crypto.com and prediction markets are on notice that “the gig is up.”
Kalshi filed a lawsuit in March against the board after it issued a cease-and-desist order asking the company to stop offering contracts that resemble sports wagers in Nevada. The lawsuit is in litigation and is expected to be heard in U.S. District Court in Nevada later this year.
Since then, multiple states with casinos have begun waging their own battles with markets, which say they are allowed to offer contracts nationwide because they are regulated by the federal Commodity Futures Trading Commission. Numerous states counter that gaming should be regulated by them.
Dreitzer’s notice says licensees who partner with event prediction markets could be disciplined by state regulators regardless of what state or tribal operation in which they conduct business.
“Offerings for sports and other events contracts may be conducted in Nevada only if the offering entity possesses a nonrestricted gaming license with sports pool approval in Nevada and meets the other requirements for sports wagering including, without limitation, wagering accounts and sports book systems,” the notice says.
The notice says event contracts based on “the outcome or partial outcome of any sporting or athletic event, or other selected events” are not allowed. The notice cited potential contracts on the World Series of Poker, the Oscars, Esports and political elections as well.
Citing Nevada Revised Statutes and gaming regulations, the notice said, “If a Nevada licensee chooses to offer sports and other event contracts in Nevada or decides to partner with other entities offering sports and other event contracts in the state, the board will consider these developments as it evaluates the suitability of the entity to maintain a Nevada gaming license.
“Moreover, if a licensee offers … contracts in another state without complying with the other state’s restrictions, prohibitions or licensing regime; partners with another entity that engages in such activities; or acts in violation of a compacted tribal right, the licensee may be subject to discipline under the Gaming Control Act.”
The notice said the interpretation would also be considered for applicants seeking licensing or suitability on new requests.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.
