The Nevada Gaming Control Board (NGCB) has had a simple message to send to regulated sportsbooks in the Silver State – back off the idea of launching sporting event contracts. In a letter addressed to licensed operators on Tuesday, the NGCB has said that any licensed operator "must be mindful" of their obligations and comply with applicable laws in the jurisdiction.
Sportsbooks forewarned – do not launch prediction markets
This comes amid heightened interest in prediction markets that have launched sporting event contracts, which resemble traditional sports betting but arguably offer better value to sports fans. Kalshi has recently closed a $300m Series D fund and is so far winning a legal challenge from Nevada to shutter its operations in the Silver State.
However, the NGCB has significantly more clout over licensed sportsbooks than it does over Kalshi, which is a CFTC-regulated entity. The regulator did not mince its words on the nature of gambling:
"Engaging in unlawful sports wagering in another state or entering into a business relationship with another entity offering unlawful sports wagering in another state may call into question the good character and integrity of the licensee."
The NGCB has taken to calling prediction markets that offer sporting event contracts "illegal," a sentiment shared by the Massachusetts Attorney General’s office, as well as other state regulators, including those in New Jersey, New York, and elsewhere.
This warning act is not a random occurrence, as regulated sportsbooks have already approached the NGCB on its prediction markets and whether it was a possibility for established companies to pursue them.
CFTC currently regulates prediction markets, but too many similarities
The regulatory limbo these platforms are in – i.e., prediction market platforms – means that they are still encroaching on the traditional sports betting space, but not really beholden to the same rigorous rules, because they are regulated under the CFTC.
However, Nevada maintains its position on sports event contracts, which are deemed a form of wagering activity even though it is regulated by the federal government. Nevada has been trying to push the company out of the state – that is, Kalshi – while Kalshi, for its own part, has filed a lawsuit claiming that only the CFTC can regulate its offer and that sporting event contracts are not subject to gambling regulators.
Kalshi is fighting similar challenges in other states as well, including Massachusetts.
