Nevada gaming regulators stepped up their crackdown on prediction markets this week, pulling key licenses from major operators DraftKings and Flutter Entertainment while the state continues to battle in court over whether sports event contracts and political prediction markets are even legal.
Nevada Gaming Control Board calls sports contracts offerings ‘incompatible’ with state
In a notice issued on Wednesday (November 12) and reviewed by ReadWrite, the Nevada Gaming Control Board announced that it had “accepted the surrender of Flutter Entertainment PLC’s Order of Registration, as well as all related licenses and approvals including those for FanDuel Sportsbooks and its license as a provider of an information service, and granted administrative approval of requests for withdrawal for all active and pending applications.”
It also stated: “[The] Board granted administrative approval of requests to withdraw all pending applications submitted by DraftKings relative to its interests in sports wagering in Nevada.”
Nevada Gaming Control Board notice pulling Flutter and DraftKings licenses over sports event contract concerns. Credit: Nevada Gaming Control Board
The memo makes it clear that regulators see the companies’ recent efforts to run or partner with prediction markets as something that just doesn’t fit within Nevada law. According to them, “Flutter Entertainment/FanDuel and DraftKings intend to engage in unlawful activities related to sports event contracts. This conduct is incompatible with their ability to participate in Nevada’s gaming industry.”
The move comes at a time when prediction markets, which let people trade on things like election results, sports outcomes, and even award shows, are facing increasing legal heat in Nevada. Some operators, including Kalshi and Crypto.com, have been arguing that these markets should fall under federal commodities rules because certain contracts trade on exchanges overseen by the Commodity Futures Trading Commission (CFTC).
Nevada regulators firmly rejects that argument, writing that “the Board considers offering sports event contracts to constitute wagering activity under NRS 463.0193 and 463.01962. Wagering occurs whether the contract is listed on an exchange regulated by the Commodity Futures Trading Commission (CFTC) or elsewhere.” The statutes talk about sports pools, basically meaning any business that takes bets on sporting events under Nevada’s gaming laws, along with sports wagering in general.
The notice explicitly names the types of event contracts the state views as gambling, citing “any sporting event, or any other event, such as the Super Bowl, the World Series of Poker, the Oscars, Esports, and political elections.”
Nevada says that anyone offering these kinds of markets has to hold a full unrestricted gaming license and get sports pool approval. As the memo states, “Offerings for these events may be conducted in Nevada only if the offering entity possesses a nonrestricted gaming license with sports pool approval in Nevada and meets the other requirements for sports wagering including, without limitation, wagering accounts and sports book systems.”
Firms could still face punishments in other states
The board also warned that companies could still face penalties for offering these contracts outside Nevada if they break the rules in whatever state they’re operating in. The memo cautions that a licensee “may be subject to discipline under the Gaming Control Act” if it offers or partners in event contract markets elsewhere without complying with local requirements.
Regulators also hinted that doing this could make a company look bad when it comes to its character and overall suitability as a licensee, stating that “engaging in unlawful sports wagering in another state or entering into a business relationship with another entity offering unlawful sports wagering in another state may call into question the good character, integrity, and associations of the licensee.”
This looks like Nevada’s strongest stance yet as the state pushes back against prediction market operators who insist their products should be regulated federally, not treated as gambling under state law.
ReadWrite has reached out to Flutter Entertainment and DraftKings for comment.
Featured image: 4kodiak from Getty Images Signature via Canva / DraftKings / Flutter Entertainment
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