NGCB Issues Fresh Warning to Operators on Sports Event Contracts
Judge Andrew Gordon Supports NGCB in Sports Event Contract Ruling
Earlier this month, a significant ruling by US District Judge Andrew Gordon favored the Nevada Gaming Control Board (NGCB). The court found that companies like Kalshi, Robinhood, and Crypto.com were engaging in illegal gambling by offering shares linked to the results of sporting events. Following this decision, the NGCB issued a warning to licensed casinos, sportsbooks, and operators, urging them to avoid partnerships with exchanges that provide sports-event contracts in Nevada without the necessary state gaming licenses.
NGCB’s Position on Sports Event Contracts and Licensing
The NGCB highlighted that while Robinhood and Crypto.com have ceased offering these contracts in Nevada, Kalshi continues to do so and is appealing the court’s decision—a move opposed strongly by the NGCB. The Board clarified that sports event contracts are considered a form of wagering, regardless of whether the transactions occur on platforms regulated by the Commodity Futures Trading Commission (CFTC).
The NGCB warned that Nevada-licensed entities without sports pool privileges participating in or associating with companies offering unauthorized sports event contracts risk jeopardizing their gaming licenses. Engaging in illegal sports betting or conducting business with entities involved in unlawful wagering activities could raise questions about a licensee’s integrity and eligibility to maintain their license.
Scope of NGCB’s Authority Over Event Contracts
The Nevada Gaming Control Board has defined its jurisdiction to include contracts related to the outcome or partial outcome of various events, not limited to sports but also covering events like the World Series of Poker, the Oscars, Esports competitions, and political elections.
These types of contracts are only lawful in Nevada if managed by entities holding a nonrestricted gaming license with specific approval for sports pool betting and if they comply with all regulations pertaining to sports wagering systems and account requirements.
Wider Regulatory Landscape and Ongoing Legal Challenges
The NGCB’s stance on sports event contracts aligns with similar views taken by regulators in states such as Arizona, Michigan, Ohio, and Pennsylvania. Several state authorities oppose sports event contracts, with Kalshi frequently facing legal challenges for operating in states with established sports betting regulations.
Following the federal court’s ruling in favor of the NGCB, it’s anticipated that more states may pursue legal actions against operators offering sports event contracts without proper licensing.
