Fight, Fight, Fight!

The Nevada Gaming Control Board’s Cease-and-Desist to Kalshi kicks off a Thunderdome Showdown: Prediction Markets vs. the Old Guard.

In a week full of headline-level news items, a cease-and-desist letter from Nevada’s gaming regulators to Kalshi might have quietly set the stage for a seismic shift in how America bets—on sports, elections, and more. Five years from now, I suspect we’ll see this as the biggest news of early 2025.

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In a recent column I wrote:

“Prediction markets are elbowing their way into the domain of licensed online gambling operators, setting the stage for an intriguing showdown that is not just about new competition but also about challenging the regulatory and operational norms that have shaped legal sports betting in the US.”

I later said:

“I’d also add that the tailwinds for election markets have turned into headwinds for sports markets.

“The industry was silent when election markets went live, but sports is an altogether different animal and is causing tension between existing licensed sportsbooks and prediction markets.”

In a January column I noted:

“I can’t imagine the licensed operators will just throw their hands in the air and tell sweepstakes companies, prediction markets, and whatever else is coming down the road, “Good for you! You outsmarted and outmaneuvered us.”

This tension I flagged months ago is no longer hypothetical—it’s here, and the NGCB’s move against Kalshi proves it. Dustin Gouker expressed a similar sentiment in his The Closing Line Newsletter:

“I am not exactly sure what he thought would happen when Kalshi started offering full-blown sports betting in 50 states… that everyone would throw them a parade? If Kalshi had stuck with elections and other stuff, gaming regulators (Nevada included) and others might not have loved it but may not have stuck their nose into Kalshi’s business.”

Or as Bruce Merati put it on LinkedIn:

And on that note: Welcome to Thunderdome!

Echoes of DFS: A Nevada Tradition

Despite its gambling-pioneer roots, Nevada’s a bellwether for regulatory showdowns.

On October 15, 2015, the NGCB branded DFS as gambling, forcing unlicensed operators out—they’ve never returned, despite wins elsewhere.

On March 07, 2025, the NGCB turned its sights on Kalshi, issuing a cease-and-desist with a 10-day clock:

“The Nevada Gaming Control Board (NGCB) today issued a cease and desist order to KalshiEX LLC, dba Kalshi, notifying the company that offering "event-based contracts" on sporting events and election outcomes "is unlawful in Nevada, unless and until approved as licensed gaming by the Nevada Gaming Commission."

The kicker? Per The Closing Line’s Dustin Gouker (Gouker managed to get a copy of the letter), the NGCB warned that ‘past unlawful action remains subject to criminal and civil penalties,’ with future defiance deemed ‘willful violations.’ Basically, this isn’t a please leave or a slap on the wrist—it’s a retroactive threat.

Kalshi CEO Tarek Mansour responded on LinkedIn, signaling defiance but leaving his battle plan vague:

I have a few quibbles with Mansour’s statement: