LAS VEGAS (KTNV) — The Nevada Gaming Control Board (NGCB) is coming after the financial exchange and prediction markets platform Kalshi for alleged unlawful activity.
On Tuesday, the NGCB issued a cease and desist letter to Kalshi, claiming the company is engaged in trading practices that are "unlawful in Nevada, unless and until approved as licensed gaming by the Nevada Gaming Control Board."
What they're referring to specifically is Kalshi's offerings on "event-based contracts" for sporting events and election outcomes. Presidential election betting was once a barred practice by the Commodity Futures Trading Commission (CFTC) on grounds it could harm U.S. election systems, but in 2024, a federal judge's ruling permitted the practice.
In fact, we showed you that practice in action during the last election cycle after Kalshi had raised hundreds of millions of dollars on bets for the presidential outcome between now-President Donald Trump and then-Vice President Kamala Harris.
▶ Watch What do you think about presidential election betting?
Despite being CFTC regulated, Kalshi continues to face federal opposition from the agency, but feds are hitting roadblocks and the trade exchange carries on. But when it comes to the states, the NGCB's move makes Nevada the first state to take legal action against event-based contracts. The NGCB claims Kalshi has violated Nevada Revised Statutes and board regulations that could result in criminal charges.
"Regarding event-based contracts on the outcome of elections, the letter informs Kalshi that even licensed sports pools in Nevada are prohibited from accepting wagers on such activity. The letter therefore advises Kalshi that its actions are in direction violation of Nevada's public policy," the NGCB said in a press release on Wednesday.
U.S. Rep. Dina Titus (D-Nev.) took to social media calling on more states to regulate and tax gaming practices:
Following my public comment highlighting the issues event contracts pose, @NevadaGCB issued a cease-and-desist order against Kalshi. I strongly support any state that wants to follow Nevada's lead and defend its right to regulate and tax gaming. https://t.co/aFAeqp1ViO
— Dina Titus (@repdinatitus) March 5, 2025
According to the letter, Kalshi must "cease all unlawful activity" in Nevada by 5 p.m. on March 14, 2025.
The company is not out of the hot water if they submit to the gaming board's demands, however, as the NGCB said past actions from Kalshi that they believe to be unlawful are still subject to criminal and civil penalties. The gaming board said any "unlawful" activity conducted from here on out will be considered willful violations.
"While we are disappointed to see the letter from the Nevada Gaming Commission, Kalshi will stay committed to our approach and keep paving the way for regulated prediction markets to thrive in the US," said Kalshi CEO Tarek Mansour on his X account in response to the NGCB's demands. Mansour went on further to say:
"To the prediction markets community: last year proved how important our mission is. We have fought hard to get to this point, but the job’s not finished and the work will continue till prediction markets achieve their full potential."
When Luana and I founded Kalshi at 21, we set out to build prediction markets into the world’s largest financial market. From day one, we defined a core principle: Do things the right way.
— Tarek Mansour (@mansourtarek_) March 5, 2025
We knew that regulation and trust had to be the foundation to build something enduring.… pic.twitter.com/0yxPYveoJi
