Key Moments:
- Nevada Gaming Control Board member George Assad stated the state would not allow unlicensed platforms like KalshiEx LLC and Crypto.com to offer products resembling sports wagers.
- Recent federal court decisions in Maryland and Nevada have delivered mixed rulings concerning the legality of sports-linked contracts.
- Cases regarding Kalshi and Crypto.com are still ongoing, with the next hearing in Nevada scheduled for December.
State Authority Emphasized in Ongoing Dispute
At a recent meeting, Nevada Gaming Control Board member George Assad made it clear that the state intends to take a firm stance against companies providing prediction market contracts that appear to be sports wagers under different terminology. Assad, who previously served as a Las Vegas judge, referenced recent federal court decisions and affirmed that individual states hold the authority to regulate gambling within their jurisdictions.
Legal Developments and Contrasting Federal Decisions
Assad cited a ruling by U.S. District Judge Adam Abelson in Maryland as a pivotal moment, stating that state powers over gambling regulation have been upheld over federal authority. He said, “The recent decision by the judge in Maryland made it crystal clear that the federal government doesn’t have exclusive jurisdiction in this field,” further noting the traditional role of states in this area.
The regulatory debate followed a decision by U.S. District Judge Andrew Gordon in Nevada, who denied Crypto.com’s request for a preliminary injunction that would have permitted the company to continue offering sports-linked contracts while legal proceedings continue. This contrasts with Judge Gordon’s earlier order in April, which temporarily allowed Kalshi to operate after the platform challenged a state-issued cease-and-desist letter from March.
Derivative Contracts Viewed as Sports Wagers
Kalshi, regulated at the federal level by the Commodity Futures Trading Commission, maintains that its offerings are derivative contracts rather than bets. However, Nevada regulators argue that these products are the functional equivalent of conventional sports wagers. Assad responded, “A derivative contract, whatever you want to call it, is nothing more than a sports wager,” adding, “Every bet made in this town is a contract … Whatever you call it, it’s still a sports bet.”
National Implications and Consumer Protection Concerns
The situation has generated conflicting legal opinions in several states, including New Jersey and Maryland, creating uncertainty for prediction-market operators aiming for broader market expansion. Assad underscored Nevada’s focus on protecting consumers, especially minors, by stating, “They want to impose their will on Nevada when we want to protect 18- and 19-year-old kids from becoming possibly addicted to gambling,” and called on state legal officials to seek recovery of what he described as “ill-gotten gains” from these companies.
Industry Reaction and Next Steps
The statements by Assad attracted attention from industry leaders attending the same regulatory meeting. MGM Resorts International CEO Bill Hornbuckle commented, “Thank you for your clarity on Kalshi. It’s interesting and appreciated.”
Legal proceedings concerning Kalshi and Crypto.com are ongoing, with the next hearing in Nevada set for December.
| Company | Regulatory Status | Recent Legal Outcome | Next Hearing |
|---|---|---|---|
| KalshiEx LLC | Federal CFTC oversight | Temporary reprieve granted in April | December (Nevada) |
| Crypto.com | Unlicensed in Nevada | Preliminary injunction denied | December (Nevada) |
- Author
Daniel Williams
