The chairman of the Nevada Gaming Control Board warned the state’s gaming attorneys Friday that the rapid expansion of sports prediction markets are an “existential” threat to the economy if they expand beyond their current scope and include slots and other casino games.
Mike Dreitzer made his comments Friday at the State Bar of Nevada’s annual Gaming Law Conference held at the Suncoast Hotel & Casino. He called the ongoing fight with prediction markets the topic of the day and one the state is trying to resolve in a favorable way.
Nevada has been locked in a legal battle in federal court with Kalshi and other unregulated sports betting prediction market operators, in an attempt to bar them from offering their products in Nevada. Prediction market operators say they’re legal under the auspices of the federal Commodity Futures Trading Commission.
Dreitzer has repeatedly warned the state’s gaming companies that they risk their licenses in Nevada if they get into the prediction market business in other states without going through any regulatory process. FanDuel gave up its registration to operate in Nevada and DraftKings withdrew its Nevada licensing application, as both seek to enter the prediction market industry in other states where sports betting isn’t legal.
“With prediction markets, it’s Nevada’s position that it’s illegal betting,” Dreitzer said. “Individuals who want to participate in that conduct in this state, there’s a way to do so legally and that’s within the regulatory structure. I can’t and won’t comment with respect to what’s going on with the courts, but I can say we have been at this for 70 years, Nevada is the gold standard of regulation, and there’s a reason for that.”
Dreitzer said licensing is vital to ensure participants who have proven themselves worthy to operate in the industry. It also helps with consumer protection, ensures the public has a fair wager, and gives regulators the ability to deal with problem and underage gambling and sports integrity.
“We have been working hard and very successfully to ensure that the public can feel as though everything in sports betting — and frankly all of gaming — is done appropriately. When you have any regimen that doesn’t do all of that, problems can ensue,” Dreitzer said.
Nevada will remain “steadfast” in its opposition to sports betting prediction markets, as Dreitzer restated his industry warning that an involvement in prediction markets in Nevada or anywhere else in the U.S. is incompatible with participating in Nevada’s gaming industry.
“I believe we’re the first state to take that stand,” Dreitzer said. “This is an existential issue for us. It may be sports betting, but it doesn’t stop there. There’s an opportunity from a technology standpoint to utilize the prediction outcomes to create slot machines and be the basis for RNGs (random number generators) for slot machines or for other types of casino gambling. We don’t want to end up with prediction casinos. We have to do everything we can to respond to this. Make no mistake, for those who seek to be involved, there is a way to do it, but they must do so in accordance with Nevada state law and broadly with state laws that have been established and done well in other jurisdictions as well for many years.”
Nevada state senators Nicole Cannizzaro, the majority leader, and Melanie Scheible, chair of the Judiciary Committee, in a separate panel discussion said that the threat of prediction markets is on the radar of legislators to see what laws need to be enacted to further protect the state. For now, they’re monitoring what’s happening in federal court.
Virginia Valentine, the CEO of the Nevada Resort Association who moderated the discussion, brought up the issue to the lawmakers by saying the industry is competing against illegal activity, where there are no rules against money laundering and about paying state taxes from their proceeds.
“We’re facing a lot of headwinds and what can we do in the legislature to help avoid some of these threats and challenges emerging today?” Valentine asked.
Cannizzaro said they have to be concerned about the health of gaming in the state, since it’s critical to the economy and the state’s tax revenue. It’s important to educate lawmakers because it’s an issue that hasn’t been brought up in terms of the need for regulation.
“Being able to establish that with the legislature from a public policy perspective is important,” Cannizzaro said. “Then it’s easier to say prediction markets may be harmful to the state’s biggest industry, and this is why we should consider regulating it. Having things like that operate outside of the purview of what we traditionally regulate in the state has implications for our tax base and implications for employment throughout the state and is detrimental to what we have established with gaming throughout the state. Those are topics definitely coming to us.”
Scheible said her Judiciary Committee will continue to meet until the next legislative session in 2027 and consider gaming-industry topics. As for prediction markets, she said she’s already talked to the gaming industry about that and been educated on the topic.
“I’m waiting for industry experts to come up with some solutions. Then we’ll evaluate them,” Scheible told CDC Gaming afterward. “I’m looking to see what the results are in the court cases.”
