Nevada Gaming Control Board Warns Licensees Against Partnering with Prediction Markets
The Nevada Gaming Control Board warned licensed operators that links to firms offering event-based prediction contracts could jeopardise their state gaming credentials.
LISTEN TO THIS ARTICLE:In a two-page advisory titled “Sports Event Contracts are Wagers”, Board Chairman Mike Dreitzer set out the regulator’s position that contracts tied to the outcome of sporting and other events resemble prohibited wagers and fall within Nevada gaming law.
The notice singled out several firms that operate prediction markets, naming Kalshi, Crypto.com and Robinhood as examples of platforms whose contracts may be treated as wagering products under state law. The Board warned that Nevada licensees who partner with or otherwise facilitate such offerings risk disciplinary action, even if those activities occur outside Nevada or on tribal lands.
Related: Kalshi, Robinhood, and Crypto.com Face Shutdown in Ohio
Nevada’s Battle with Federal Oversight of Event Contracts
The advisory follows an intensified legal and regulatory clash between prediction market operators and state gambling regulators. Kalshi sued the Nevada board in March after receiving a cease-and-desist order that accused the company of offering contracts mimicking sports bets in Nevada; the case is pending in U.S. District Court in Nevada. At the Control Board’s October 8 meeting, board member George Assad praised a recent court decision against Crypto.com and said prediction markets were on notice that “the gig is up”.
The dispute reflects a broader federal-versus-state jurisdictional split. Prediction market operators argue their products are regulated at the federal level by the Commodity Futures Trading Commission, and therefore can be offered nationally. State and tribal regulators counter that gambling and betting fall squarely within state regulatory authority and that event-based contracts should be treated as wagers under local gaming statutes.
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Compliance Challenges Ahead for Licensed Operators
Dreitzer’s notice cites Nevada Revised Statutes and existing gaming regulations to clarify the board’s view: event contracts tied to the outcome or partial outcome of sports contests or other selected events are not permitted in Nevada unless the offering entity holds an appropriate nonrestricted gaming license with sports pool approval and meets all other sports wagering requirements, including approved wagering accounts and sportsbook systems. Examples the board identified include potential contracts on poker tournaments such as the World Series of Poker, entertainment awards, esports competitions and political elections.
The Board also made clear its interpretation will factor into suitability reviews for current licensees and new applicants. It warned that licensees who offer contracts in other states without complying with those jurisdictions’ rules, or who partner with entities that do so, may face disciplinary measures under the Gaming Control Act. Tribal compacts and their protections were also flagged as a potential area of conflict.
Legal and industry observers say the immediate practical effect depends on how federal courts and other state regulators rule in the coming months. If federal judges side with the CFTC-regulated model, operators could gain a broader footing. If courts back state regulators, vendors and platforms will likely need to redesign products or restrict access in certain jurisdictions. For Nevada, a global gaming hub, the board’s stance could influence operators’ national product strategies and their willingness to partner with fintech platforms that offer event-based contracts.
For licensed operators, the advisory underscores a complex compliance landscape: firms must weigh potential enforcement risk in Nevada and elsewhere, the terms of tribal compacts, and whether their third-party partners’ offerings meet state-specific licensing and operational standards. Regulatory outcomes in Nevada and pending federal litigation will be pivotal in determining the future of prediction markets tied to sports and other events.
As the dispute continues to play out in courtrooms and regulatory offices, operators, lawyers and trade groups are closely watching for rulings that will establish where the line is drawn between regulated financial contracts and wagering under state gambling laws.
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