Nevada Gaming Control Board Chair Details Why Prediction Market Sports Contracts Qualify as Scams

Nevada Gaming Control Board Chair Mike Dreitzer described sports event contracts from prediction markets as “dangerous,” “obscene,” and “criminal.” Speaking on the weekly New Normal webinar co-hosted by Victor Rocha and Jason Giles alongside tribal lawyer Scott Crowell, Dreitzer outlined multiple flaws in the products that mimic state-regulated sports betting. The NGCB is the first gaming commission to win the opportunity to enforce its gaming laws against Kalshi and similar platforms, according to reporting by InGame. Sports, entertainment, and election contracts are banned in Nevada.

Dreitzer said the NGCB’s main goal is safe and fair gambling. He called the peer-to-peer claim a nonsense argument that does not get refuted enough, noting that poker, horse racing, and bingo are also peer-to-peer yet constitute gambling. These markets are not bettor-to-bettor but instead hedge fund or designated contract market versus casual bettor, Dreitzer said, with the latter getting exploited. “The only price they are discovering is the maximum amount they can gouge individual casual bettors on their DCM. There is no price discovery, that is a fictional notion.” He added that some designated contract markets create third-party entities to take the other side, calling that bookmaking rather than liquidity provision. Cash-out options and selective participation by market makers further align the formats with traditional sportsbooks, he said.

Crime and Deception Are Not Innovation

Dreitzer rejected claims that prediction markets represent innovation through financial swaps or other features. “Crime and deception are not innovation,” he stated. Many platforms allow trading at age 18 while most states set a 21-year minimum for betting. “Wager billions of dollars is not innovation. Doing it in states in which it’s otherwise a violation of the penal code, that’s not innovation.” Dreitzer warned that $8 billion-plus wagered on Kalshi since Jan. 1 by 18-, 19-, and 20-year-olds is “incredibly dangerous” and will erode confidence. The NGCB tracks every dollar wagered with clear consumer recourse, he said, while these markets “regulate by tweet.”

The Loper-not-so-Bright Era

The panel viewed the latest CFTC interim final rule as gamesmanship that attempts to nullify court losses rather than accept them. Crowell noted federal agencies typically use memos to comply after defeats, but here the CFTC seeks to create the regulatory structure Congress never intended for gambling. Dreitzer called the situation the “Loper-not-so-Bright era” after the Supreme Court ruling overturning Chevron deference in June 2024. Agency interpretations no longer receive that deference. The core issue remains consumer protections and distinguishing entertainment betting from investing, Dreitzer said. Conflating the two is bad and must be regulated properly as an entertainment exercise.

Reporting: InGame

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