Nevada’s gaming watchdog has intensified its stance towards prediction markets, becoming a member of a rising listing of state regulators warning that contracts primarily based on sports activities, politics, or leisure outcomes are thought of illegal betting exercise.
On Wednesday, the Nevada Gaming Control Board (NGCB) issued a discover (pdf) titled “Sports Event Contracts Are Wagers,” underscoring that such contracts are deemed wagering below state regulation—“whether the contract is listed on an exchange regulated by the Commodity Futures Trading Commission (CFTC) or elsewhere.”
The discover cautioned that any licensed entity providing all these contracts, or partnering with corporations that accomplish that, could face suitability critiques or disciplinary actions. This applies even when the actions happen exterior Nevada or on tribal lands.
The NGCB explicitly listed the World Series of Poker, the Oscars, Esports, and political elections amongst examples of occasions that fall inside its definition of prohibited wagering. As the letter said, “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.”
Assad’s Strong Words Reflect Board’s Sentiment
The warning aligns with feedback made earlier this month by board member George Assad, who criticized prediction markets throughout an October 8 listening to. Assad characterised them as “nothing more than a word salad” and celebrated current courtroom choices limiting such platforms.
“A derivative contract or whatever you want to call it is nothing more than a sports wager,” Assad mentioned. “A sports wager is a sports wager. Every bet made in this town is a contract.”
He went on to argue that prediction markets, no matter how they’re labeled, stay below the NGCB’s jurisdiction. Nevada’s resistance to these platforms has been long-standing. In March, the state issued a cease-and-desist order to Kalshi, main to a lawsuit that briefly allowed the corporate to proceed operations by means of a preliminary injunction—now below enchantment.
Similar authorized battles adopted with Crypto.com and Robinhood, each of which sued the board after receiving related orders. In current rulings, Judge Andrew Gordon upheld Kalshi’s injunction however denied Crypto.com’s, concluding that the corporate’s argument about its “swap” contracts failed to show a transparent preemption over state regulation.
Dreitzer Emphasizes Balance Between Innovation and Compliance
Despite the agency stance, NGCB Chair Mike Dreitzer has expressed a nuanced place. Speaking on the Global Gaming Expo in Las Vegas, Dreitzer mentioned Nevada is “open for business” when it comes to technological development, however innovation should function inside current authorized frameworks.
“We want to foster innovation, we want to find a way to bring it to Nevada as early as possible, but it has to be done in conjunction with the legal requirements,” he mentioned. Dreitzer famous that the state’s place on prediction markets was established earlier than his tenure, although he emphasised a willingness to have interaction with compliant corporations.
His feedback contrasted with these of Missouri Gaming Commission govt director Mike Leara, who criticized prediction markets outright throughout the identical panel.
Industry Reactions and Legal Outlook
The NGCB confirmed it had obtained “direct inquiries” from licensees about prediction market partnerships. Prominent operators equivalent to FanDuel, DraftKings, and Underdog have explored associated ventures in different states—FanDuel by means of a cope with CME Group and Underdog by means of a collaboration with Crypto.com.
However, these corporations lack Nevada licenses due to the state’s in-person registration requirement, whereas others like Caesars Sportsbook and BetMGM have avoided coming into the area. During a current earnings name, BetMGM CEO Adam Greenblatt said that “as the law stands today, sports predictions markets are — in essence — illegal sports betting.”
Nevada’s main on line casino operators, represented by the Nevada Resort Association (NRA), have been vocal of their opposition. NRA President Virginia Valentine advised iGB that prediction market corporations are “gambling with no regulation” and lack shopper safeguards. “There are no requirements for responsible gambling, they don’t pay any state income tax,” she mentioned. “So it looks a lot like gambling, and we’ll see. Is it the future of gambling or is it the end of sportsbooks? I don’t know, but we’re going to be watching that very closely.”
As a number of lawsuits unfold nationwide, the battle between state regulators and prediction market platforms continues to take a look at the boundaries between gaming regulation and monetary regulation.
