Nevada Gaming Control Board Takes Action Against Kalshi

The Nevada Gaming Control Board (NGCB) has taken a decisive stance against Kalshi, a prediction market platform. While Kalshi operates throughout the United States due to its distinctive business approach, which shares some similarities with betting, it is regulated under the Commodity Futures Trading Commission (CFTC).

Kalshi Faces Challenges in Nevada Following Cease-and-Desist Notification

The NGCB has expressed its disagreement by sending a cease-and-desist letter to KalshiEX LLC, known as Kalshi, informing the company that its event-based contracts are illegal in Nevada. According to the regulator, sporting events and election outcomes are not permissible on Kalshi’s prediction market platform unless a license is obtained from the Nevada Gaming Commission.

The communication further detailed specific breaches of Nevada Revised Statutes and Nevada Gaming Commission Regulations, which the company is accused of violating through its operations. The NGCB has set a deadline of 5:00 pm on March 14, 2025, for Kalshi to withdraw from the market. The NGCB’s Chairman, Kirk Hendrick, commented:

‘Every sports pool in Nevada must undergo an extensive investigation prior to licensing, must adhere to strict regulation once licensed, and must pay all applicable taxes and fees. Any unlawful attempts to circumvent Nevada’s right to regulate gaming activity within its borders will be met with the full force of criminal and civil penalties.’

This isn’t the first challenge Kalshi has faced. Before the US presidential election in 2024, the CFTC attempted to prevent Kalshi from offering prediction markets on the election outcome on multiple occasions. Kalshi contested these attempts in court and emerged victorious, but now the NGCB has taken matters into its own hands.

The NGCB may not stop here. The regulator’s leader has indicated that past unlawful actions could lead to future criminal and civil penalties, and any future violations would be considered as ‘willful violations.’

The Complexity of Kalshi’s Legal Standing

The legality of prediction markets remains a contentious topic. Several legal experts argue that Kalshi and similar platforms do not fulfill the criteria for traditional sports gambling companies because they do not set the odds themselves.

Nevertheless, the regulator in Nevada holds a different view. It remains to be seen how this situation will unfold. Will Kalshi withdraw from Nevada, accepting a temporary setback, or will it challenge the Nevada Gaming Control Board as it did with the CFTC?

Recently, there has been significant opposition from various stakeholders in the gambling industry against prediction markets. Tribal operators and leaders have claimed that prediction markets undermine tribal gaming, and the American Gaming Association has raised similar concerns regarding the regulated gambling market.