The Nevada Legislature is considering a piece of legislation aimed at combating the prevalence of illegal gambling activity by holding operators responsible for their actions.
Sen. Rochelle Nguyen has introduced Senate Bill 256, a measure that requires “the disgorgement of any profit, gain, gross receipt or other benefit related to certain illegal gaming activities.” The bill has been filed as state regulators across the country take steps to prevent the operation and growth of online sweepstakes casinos. SB 256 does not define illegal online sweepstakes casinos but takes issue with any unlicensed operator in general.
“This is a crucial issue that affects not only the credibility of our gaming regulations but also consumer protections and state revenues,” said Nevada Legislative Intern Janice Wong during a public Senate Judiciary Committee hearing on the measure. “With the rise of online gaming apps, we’ve seen an increasing number of unlicensed platforms operating in the shadows accepting illegal wagers, engaging in fraudulent practices, and profiting outside the bounds of our regulatory framework. These bad actors not only undermine our legal gaming industry but also put our consumers at risk.”
Framework of Senate Bill 256
SB 256 aims to protect consumers and the regulated gaming industry by forcing illegal gambling operators to forfeit profits and benefits made from their illicit operations. The bill calls for any profits from violators to be allocated toward the Nevada General Fund.
Nguyen’s bill also levies stricter criminal penalties for hosting an illegal gambling operation.
SB 256 calls for individuals who violate or conspire to violate its provisions to be guilty of a category B felony with potential “imprisonment in state prison for a minimum term of not less than one year and a maximum term of not more than 10 years.” Any person who violates or attempts to violate SB 256’s provisions also faces up to a $50,000 fine.
The measure also penalizes individuals who failed to report, pay, or truthfully account for the licensing fees and taxes imposed by the Nevada Revised Statutes.
Those who fail to report or evade licensing fees and taxes are guilty of a Category C felony. SB 256 also considers multiple offenses with increases in penalties as a result.
“This bill ensures that everyone plays by the same rules,” added Wong. “Accountability is important. If an online gaming app engages in illegal activities, they should not be allowed to profit from it. This bill sends a clear message – if you operate illegally, you will be held accountable.”
Nevada regulator staying busy
Last week, the Nevada Gaming Control Board sent a cease and desist letter to Kalshi ordering the prediction market operator to stop accepting business from residents.
The board determined that Kalshi’s event contracts on elections and sports are “unlawful in Nevada unless and until approved as licensed gaming by the Nevada Gaming Commission.”
As a result, the regulator has voiced its willingness to pursue criminal and civil penalties for Kalshi if the event contract provider continues to bypass Nevada laws. Kalshi, which offers event contracts in over 35 states, has until March 14 to stop accepting Nevada customers.
