The Nevada Gaming Control Board stated that Kalshi provided event-based contracts that closely resembled sports wagers without obtaining the necessary license
Nevada officials have given KalshiEX LLC, a prediction market platform based in New York, extra days to reply to a cease-and-desist order from the Nevada Gaming Control Board (NGCB). The firm, which does business as Kalshi, had to follow the order by March 14, at first, but now the regulators have allowed more time for an official answer.
Nevada Gaming Control Board Accuses Kalshi of Running Unlicensed Sports Betting Operation
The NGCB, which keeps an eye on gaming rules in Nevada, said Kalshi offered event-based contracts that look a lot like sports bets without the right license. Kirk Hendrick, who heads the NGCB, pointed out that Nevada law keeps a tight grip on gaming operations. He stressed that any group taking bets on events needs to go through a tough licensing process. Hendrick also warned that breaking these rules could result in both criminal and civil punishments, as reported The Las Vegas Review-Journal.
Kalshi operates as a financial exchange with federal regulations monitored by the Commodity Futures Trading Commission (CFTC). The company lets people trade on real-world event results through yes-or-no deals. Its platform covers topics like financial indicators, weather changes, and political shifts. Some of its recent offerings allowed users to bet on whether the Department of Education might be shut down and how many tornadoes might happen in a month.
However, Nevada regulators say Kalshi is running an unlicensed sports betting operation. The NGCB pointed out several violations of state gaming laws, including Regulations 22 and 26B, which ban unauthorized betting. Also, the Board stressed that even licensed sportsbooks in the state cannot take bets on election results, backing up its view that Kalshi’s offerings break Nevada law.
Kalshi Granted Extension, but Future Compliance with Nevada Gaming Laws Uncertain
In the cease-and-desist letter, Hendrick made it clear that past violations could still face legal action and that any ongoing operations in Nevada would be seen as purposeful breaches of gaming laws. He also cautioned against any attempts to get around the state’s regulatory power, saying that Nevada would act against such efforts.
Although Kalshi’s legal team got an extension, it is not clear if the company will fight the Board’s decision or try to comply. The NGCB has not said how long the extension is or given any more details about the case.This issue highlights the bigger argument about how to classify event-based contracts and where to draw the line between financial trading and gambling.
Kalshi says its platform offers a legitimate financial service that is regulated at the federal level. However, Nevadaofficials insist that any company offering event-based betting in the state must follow its tough gaming laws.
