Nevada Sends Cease-and-Desist Order To Kalshi
The last couple of months for forecast company Kalshi have actually seen a whirlwind of activity with unpredictability, and on Tuesday the operator took another hit.
The Nevada Gaming Panel (NGCB) issued a cease-and-desist order to Kalshi to end their operations in the Silver State and exit the marketplace on Friday, March 14 by 5 p.m., citing infractions of state video gaming laws and for taking part in unlawful gaming activity such as "event-based contracts" on sporting occasions and election outcomes, all of which are illegal in the state unless authorized as a licensed video gaming operator by the Nevada Gaming Commission (NGC).
Any non-compliance to the order could cause criminal or civil charges.
"Every sports swimming pool in Nevada need to go through an extensive investigation prior to licensing, must comply with stringent regulation as soon as accredited, and should pay all applicable taxes and costs," said NGCB Chairman Kirk Hendrick in the letter.
"Any unlawful attempts to prevent Nevada's right to manage video gaming activity within its borders will be met the complete force of criminal and civil charges."
Prediction markets such as Kalshi, Polymarket, Augur and PredictIt differ from traditional sportsbooks in that they are regulated at the federal level by the Commodity Futures Trading Commission (CFTC), permitting them to run throughout all 50 states.
The CFTC is an independent federal regulatory company tasked with managing the U.S. derivatives markets. This regulatory distinction has actually created significant problems with state gaming authorities, particularly in Nevada, which imposes strict oversight on gambling-related activities.
Kalshi took off onto the American landscape with their real-time markets on last November's Presidential election.
"While we're disappointed with the Commission's assessment, Kalshi has constantly held the utmost respect for regulators and the regulatory procedure. We've been a federally regulated exchange for over four years and a federally regulated clearinghouse for about 6 months. We are happy to have led the way for forecast markets to flourish in the U.S. We look forward to a speedy resolution to this matter and to making sure that Americans continue to have access to safe, managed, and transparent forecast markets," said a main Kalshi spokesperson on the matter.
Titus Letter
All of this comes on the heels of a letter sent out by Nevada Congresswoman Dina Titus (D) in late February.
Titus, who has represented Nevada's First District considering that 2013, revealed in a tweet back on Feb. 24 that she had actually sent a letter due to issues about legalizing forecast markets on sports agreements, arguing it could undermine state-regulated sports wagering, consumer protections, and tax incomes adding that it is a backdoor method to enable sports wagering in all 50 states.
The CFTC will be holding a public roundtable later this month to discuss regulating prediction markets, including sports-related agreements. The commission had requested public input on the matter, also known as Titus' letter, by Feb.
.