Nevada regulators are adopting a stringent approach towards firms offering prediction market contracts that resemble sports betting, in light of a series of federal court rulings questioning their legality.

During a recent meeting of the Nevada Gaming Control Board, member George Assad stated that the state will not allow unlicensed platforms like KalshiEx LLC and Crypto.com to operate products he perceives as sports bets under alternative labels. Assad, a former Las Vegas judge, emphasized that recent court decisions reaffirm state authority over gambling regulations.

“The recent ruling from a Maryland judge clarified that the federal government does not hold exclusive jurisdiction in this arena,” Assad noted, alluding to a decision by U.S. District Judge Adam Abelson. “States have the right to govern gambling within their borders, as has been historically recognized.”

Assad’s comments followed U.S. District Judge Andrew Gordon’s denial of Crypto.com’s request for a preliminary injunction that would have allowed it to keep offering sports-related contracts while its legal battle against the Board unfolds. This decision stood in contrast to Gordon’s earlier ruling in April, which temporarily favored Kalshi, currently contesting a state-issued cease-and-desist order from March.

Kalshi, which operates under the oversight of the Commodity Futures Trading Commission, claims that its contracts are derivatives, not wagers. In contrast, state regulators argue that these products closely resemble conventional betting markets.

“A derivative contract, regardless of the terminology, equates to a sports wager,” Assad stated. “Every bet placed in this city constitutes a contract … No matter how it’s labeled, it remains a sports bet.”

The controversy is unfolding across multiple states. Courts in places such as New Jersey, Maryland, and others have rendered conflicting judgments, leading to ambiguity for prediction market operators aiming to expand nationally. Assad reiterated Nevada’s priority is to safeguard consumers and deter minors from developing gambling addictions.

“They intend to impose their regulations on Nevada, while our goal is to protect 18- and 19-year-olds from potential gambling addiction,” he remarked. He also urged state attorneys to retrieve what he considers “ill-gotten profits” from companies benefitting from such contracts.

Assad’s insights caught the attention of industry leaders present at the same meeting. MGM Resorts International CEO Bill Hornbuckle, attending for a separate licensing discussion, praised him, stating, “Your clarity regarding Kalshi is appreciated and intriguing.”

Legal cases involving Kalshi and Crypto.com are still progressing, with the next hearing expected in December.