The Nevada Gaming Control Board (NGCB) has issued a warning to licensed gaming operators regarding “sports event contracts” and similar products in the prediction market, indicating that these activities qualify as wagering according to state legislation.
In an industry alert published on Wednesday, the NGCB clarified that these contracts fall under the gambling definitions specified in NRS 463.0193 and 463.01962.
The Board has classified the offering of sports event contracts, along with certain other event contracts, as engaging in wagering activities. This applies regardless of whether the contracts are associated with exchanges regulated by the Commodity Futures Trading Commission (CFTC) or other entities.
This clarification is underscored by ongoing litigation involving platforms such as Kalshi and Robinhood Derivatives LLC, which aim to conduct prediction markets for various events, including elections and sports, outside the jurisdiction of state gambling regulations.
The NGCB stated that contracts related to sports outcomes, esports, events like the World Series of Poker, the Oscars, and political elections are classified collectively as “Sports and Other Event Contracts.”
These contracts may only be offered in Nevada by operators possessing a nonrestricted gaming license with authorization for sports pools.
The regulator cautioned that Nevada licensees could face disciplinary measures if they engage with or collaborate with entities providing unlicensed contracts in Nevada or other states.
The Board noted that such actions will be considered in assessing the suitability of both existing licensees and new applicants.
This guidance arises amidst escalating tensions between federal and state authorities on the categorization of prediction markets. Recently, the CFTC withdrew its appeal in a case that permitted Kalshi to list political event contracts, strengthening calls for a national regulatory framework.
Separately, the NGCB has expressed concerns regarding the partnership between FanDuel and CME Group and has scrutinized Crypto.com’s attempts to introduce similar products in Nevada.
The regulator plans to continue monitoring these developments to ensure that the state retains control over gambling practices.