The Nevada Gaming Control Board (NGCB) became the first U.S. regulator to send a cease-and-desist letter to Kalshi, the controversial New York-based prediction market, according to iGB.
In a release, the NGCB said that offering sports and election contracts “is unlawful in Nevada, unless and until approved as licensed gaming by the Nevada Gaming Commission.” Kalshi is to cease operations in the state by 5 p.m. on March 14 or be subject to legal action. Even past operations, the board said, “remains subject to criminal and civil penalties.”
The letter represents the first action taken against prediction markets at the state level. Last fall, Kalshi survived a legal challenge in federal court from the Commodities Futures Trading Commission (CFTC). That has allowed the platform, and others such as Crypto.com, to continue operating, although future challenges could be coming.
Federal officials originally sought to bar Kalshi and others from offering election markets. Those efforts were unsuccessful and, before the November election, the platforms took in billions worth of contracts. But in January, Kalshi began offering sports contracts, which has caused the gaming industry to take notice.
Notably, the NGCB mentioned both election and sports contracts as being illegal in the state. It said that “even licensed sports pools in Nevada are prohibited from accepting wagers” on elections. This could be another angle for state regulators to pursue moving forward.
