Kalshi ordered to exit Nevada as NGCB issues cease-and-desist

The Nevada Gaming Control Board (NGCB) has ordered prediction market operator Kalshi to halt its operations in the state and exit by 5:00 PM on March 14, citing violations of state gaming laws.

In a cease-and-desist letter, the NGCB declared that event-based contracts on sports and election outcomes are “unlawful in Nevada unless and until approved as licensed gaming by the Nevada Gaming Commission.” The order warned that non-compliance could lead to criminal and civil penalties.

“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,” NGCB Chairman Kirk Hendrick said in the letter.

The NGCB emphasized that even licensed sportsbooks in Nevada are prohibited from offering election-based betting, underscoring the state’s stringent regulations on wagering activities. Kalshi, which operates under the oversight of the Commodity Futures Trading Commission (CFTC), provides event-based trading contracts that it classifies as financial derivatives rather than traditional bets.

The enforcement action follows remarks by Rep. Dina Titus (D-Nevada), who recently called for increased scrutiny of prediction markets. “Prediction contracts on sports create a backdoor way to legalize sports betting in states that have not authorized it,” Titus stated.

Prediction markets such as Kalshi differ from traditional sportsbooks in that they are regulated at the federal level by the CFTC, allowing them to operate across all 50 states. This regulatory distinction has created friction with state gaming authorities, particularly in Nevada, which imposes strict oversight on gambling-related activities.

Nevada has historically maintained a conservative stance toward internet-based gambling. The state does not permit online casinos or a state lottery, prohibits daily fantasy sports, and allows only one internet poker operator—the World Series of Poker (WSOP). Regulations also require sports bettors to register in person at a casino before placing mobile wagers, a rule that has discouraged major operators like DraftKings and FanDuel from entering the market.

Kalshi has yet to publicly respond to the NGCB’s order but may seek legal recourse. Because its event-based contracts are categorized as derivatives rather than wagers, Kalshi could argue that it does not fall under Nevada’s gaming jurisdiction. A potential compromise could involve the company continuing its operations in the state while excluding contracts tied to sports and election outcomes.

The decision has fueled ongoing debates over the role of prediction markets in regulated gaming. Tribal gaming organizations have voiced opposition to platforms like Kalshi, arguing they violate existing state and federal laws and could undermine tribal gaming rights.

Conversely, some industry figures defend prediction markets as a valuable forecasting tool. Brian Armstrong, CEO of cryptocurrency exchange Coinbase, recently argued that prediction markets “consistently outperform traditional polls” in forecasting election results and other major events.