Kalshi's Nevada Betting Extension
Nevada orders Kalshi to address cease-and-desist over offering sports and elections contracts
In a twist of events, prediction market maker, Kalshi, has been given an extension by the Nevada Gaming Control Board (NGCB) to respond to a cease-and-desist order related to offering event-based contracts in the state. Originally issued on March 4 with a deadline of March 14, the Board agreed to an additional time period, acknowledging a request from Kalshi's legal team.
However, the press statement didn't clarify whether Kalshi plans to comply with the order, or challenge it. The order itself claims that Kalshi's operations are unlawful in Nevada unless authorized as licensed gaming by the Nevada Gaming Commission.
The NGCB letter outlined multiple Nevada Revised Statutes and Gaming Commission regulations that Kalshi is allegedly violating. Failure to comply could result in criminal charges, the letter warned. Additionally, the Board clarified that event-based contracts on election outcomes are off-limits for even licensed sports pools in Nevada.
NGCB Chairman Kirk Hendrick emphasized the rigorous process any sports pool must undergo for licensing, including adhering to strict regulations, paying taxes, and fees. Hendrick also expressed a stern warning, stating that any attempts to bypass Nevada's jurisdiction to regulate gaming activity would face the full force of criminal and civil penalties.
Interestingly, Kalshi is currently operating under a preliminary injunction allowing continued operations in Nevada while the case progresses. This ruling, granted by a federal judge, asserts that Kalshi's Commodity Futures Trading Commission (CFTC) regulated status overrides state gambling laws. The case is ongoing, with hearings continuing.
Despite opposition from six states, including Nevada, Kalshi continues offering sports and political event contracts in Nevada, processing over $400 million in contracts during March Madness. This ruling sets a precedent for ongoing federal-state jurisdictional conflicts, with New Jersey also recently siding with Kalshi in a separate lawsuit. The key to Kalshi's position lies in maintaining its CFTC designation as a regulated exchange rather than an unlicensed gambling operator.
- Kalshi is yet to announce whether it plans to comply with the Nevada Gaming Control Board's (NGCB) cease-and-desist order regarding sports-betting in Nevada, or choose to challenge it.
- The NGCB's cease-and-desist order asserts that Kalshi's operations in Nevada are unlawful unless authorized as licensed gaming by the Nevada Gaming Commission due to alleged violations of Nevada Revised Statutes and Gaming Commission regulations.
- In a turn of events, Kalshi is currently operating in Nevada under a preliminary injunction that allows continued operations while the case progresses, with the ruling claiming that Kalshi's Commodity Futures Trading Commission (CFTC) regulated status overrides state gambling laws.
