Another state regulator is lettings its licensees know to take care when it comes to prediction markets.
Nevada Gaming Control Board (NGCB) Chair Mike Dreitzer authored a memo to licensees posted Wednesday with the ominous title “Sports Event Contracts Are Wagers“.
In the note, Dreitzer stated that licensees had been inquiring about the matter, so the memo clearly states the position of the NGCB.
Memo spells out exactly how NGCB defines sports contracts
“The Board considers offering sports event contracts, or certain other events contracts, as constituting wagering activity under NRS 463.0193 and 463.01962. Wagering occurs whether the contract is listed on an exchange regulated by the Commodity Futures Trading Commission (CFTC) or elsewhere. Examples of event contracts that the Board specifically considers to be wagering subject to its jurisdiction include event contracts based on the outcome or partial outcome of any sporting or athletic event, or other selected events such as the World Series of Poker, the Oscars, Esports, and political elections (“Sports and Other Event Contracts”),” the memo noted.
It went to say that only operators with an active sports pool license in the state along with a valid sports betting operator can offer sports contracts in Nevada.
Other states including CA could impact standing
Like regulators in Ohio and Michigan, Dreitzer also cautioned that violations in other jurisdictions could have bearing on a company’s standing in the Silver State.
“Moreover, if a licensee offers Sports and Other Event Contracts in another state without complying with the other state’s restrictions, prohibitions, or licensing regime; partners with another entity that engages in such activities; or acts in violation of a compacted tribal right, the licensee may be subject to discipline under the Gaming Control Act,” Dreitzer cautioned.
This could mean that California is a treacherous state for interested operators, as tribal entities are challenging the legality of contracts from groups like Kalshi in court. While most operators have spoken about keeping these partnerships with the likes of Kalshi and Crypto.com to states with no regulated sports betting, the tribal inclusion in Dreitzer’s statement means that will not be the only factor the regulator considers.
FanDuel and DraftKings not too active in NV
Neither FanDuel nor DraftKings operate online sports betting in Nevada. FanDuel does power the sportsbook at the Boyd-owned Fremont Hotel and Casino and holds a supplier license.
During an August meeting, NGCB members expressed concerns about FanDuel’s partnership with financial firm CME Group to partner on offering event contracts through FanDuel in the future. The partnership has not launched and FanDuel has never fully said when sports contracts could become part of the partnership.
Meanwhile, BetMGM and MGM Resorts, which both consider Las Vegas to be the core of both companies’ brand strategies, have vehemently said there is no plan to involve the companies in prediction markets until they get the blessing from regulators.
Dueling lawsuits with NGCB on issue conflict
The NGCB is currently embroiled in two separate lawsuits challenging the legality of sports-related prediction markets in the state. In one case, Kalshi sued the regulator after it issued the firm a cease and desist. In that case, Judge Andrew Gordon granted a preliminary injunction keeping Kalshi online while the case moves on.
However, in a similar lawsuit with regulators and Crypto.com, Gordon denied the injunction and expressed skeptcisim around the argument Crypto.com offered on why sports contracts are not gambling that should be regulated by the state.
