The Nevada Gaming Control Board is telling gaming operators that their licenses could be in jeopardy if they work with companies that offer predictive market contracts.
Board Chairman Mike Dreitzer on Wednesday issued a two-page industry notice titled “Sports Event Contracts are Wagers” explaining 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 October 8 Board of Control meeting, board member George Assad applauded a recent court ruling against Crypto.com and the prediction markets are getting word that “the game 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 similar to sports betting in Nevada. The lawsuit is in litigation and is expected to be heard in the US District Court in Nevada later this year.
Since then, several states with casinos have begun fighting 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. Many states object that gambling should be regulated by them.
Dreitzer’s notice says that licensees who cooperate with event prediction markets can be disciplined by state regulators regardless of the state or tribe in which they operate.
“Offerings of sports and other event contracts may be conducted in Nevada only if the offering entity holds an unrestricted gaming license with Nevada sports pool approval and meets the other requirements for sports betting including, without limitation, gaming accounts and sportsbook systems,” the release states.
The notice says event contracts based on “the result or partial result of any sporting or athletic event or other selected event” are not permitted. The announcement also cited potential contracts for the World Series of Poker, the Academy Awards, Esports and political elections.
Referring to Nevada’s revised gaming statutes and 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 that offer sports and other event contracts in the state, the board will consider these developments when evaluating the entity’s suitability to maintain a Nevada gaming license.
“In addition, if a licensee offers … contracts in another state without complying with that other state’s restrictions, prohibitions, or licensing rules; partners with another entity engaged in such business; or acts in violation of a compressed 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 licensure or suitability on new requests.
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