Nevada Gaming Control Board Intensifies Oversight on Prediction Market Event Contracts
Advisory from the Nevada Gaming Control Board to Sportsbook Operators
On Tuesday, the Nevada Gaming Control Board (NGCB) issued a communication to all licensed sportsbooks emphasizing the importance of adhering strictly to legal obligations and maintaining suitability standards in every jurisdiction where they operate. The Board highlighted that operators offering contracts tied to sports or other events will undergo rigorous scrutiny regarding their licensing suitability.
New Regulations Governing Prediction Market Products
The NGCB clarified that these rules apply irrespective of whether the contracts are traded on platforms regulated by the Commodity Futures Trading Commission (CFTC), the federal body supervising prediction markets. Operators providing these contracts or engaging in related partnerships within Nevada, other states, or tribal territories may face detailed suitability assessments and possible disciplinary measures.
Similarly, regulatory bodies in Ohio, Michigan, and Arizona have warned betting operators about entering the prediction market arena. This regulatory caution exists despite recent interest expressed by leaders from major gambling firms, including Flutter (FanDuel’s parent company) and DraftKings, who are exploring opportunities in this emerging sector. State regulators insist that prediction market operations should fall under state jurisdiction rather than federal oversight by the CFTC.
In response, some prediction market providers have challenged this stance legally. For instance, Kalshi recently filed a lawsuit against the Ohio Casino Control Commission, alleging that restrictions imposed on its ability to offer event contracts related to sports outcomes exceed the authority of the state regulator.
Definition of Potential Violations According to the NGCB
The NGCB considers certain event contracts as wagering activities falling within its enforcement scope. These encompass contracts based on outcomes or partial outcomes of sporting events as well as notable competitions and events such as the World Series of Poker, the Oscars, esports tournaments, and political elections.
The Board has stated that such offerings are allowed only if the entity holds a nonrestricted gaming license with sports pool approval in Nevada and fully complies with all applicable sports wagering regulations, including those governing wager accounts and sportsbook operational systems.
NGCB member George Assad emphasized that derivative contracts—regardless of their classification—are essentially sports bets. As these fall under the authority of the Nevada Gaming Commission and the NGCB, operators who violate these regulations by offering such products may face disciplinary action.
