A New York-based company has until Friday afternoon to stop offering its “event-based contracts” in Nevada before state authorities turn to prosecuting it and its top managers.
Nevada Gaming Control Board on March 4 issued a cessation of letters to Kalshiex LLC and did business such as Kalshi and Kalshi.com, which offers a platform where users can trade with the result of future events, including financial indicators, weather patterns, awards and political results.
The demand letter, signed by the Chairman of the Board Kirk Hendrick, instructs the company to cease all illegal activities within Nevada by March 17.
Kalshi did not immediately return messages that sought comment.
“Every sports pool in Nevada must undergo a comprehensive investigation before licensing, must comply with strict regulation when it was licensed and must pay all applicable taxes and fees,” Hendrick said in the letter which was also copied to Gov Joe Lombardo, Secretary of State Francisco Aguilas, several members of the Lawyer’s General
“All illegal attempts to circumvent Nevada’s right to regulate gaming activity within its boundaries will be fulfilled with the full power of criminals and civil penalties,” Hendrick said.
Kalshi, who says it is the first exchange regulated by the Federal Commodity Futures Trading Commission, is devoted to dealing with the result of future events, usually with yes-or-not proposals.
Its website deals with a number of subjects, from inflation and interest to unemployment and whether the government will be shut down.
Among the proposals published on the Kalshi website Thursday was “Will Trump eliminate the Ministry of Education this year?” and “the number of tornadoes this month will be higher or lower than 150.”
The company says its vision is to let people benefit from their opinions, act within the domain for every day and hedging risks that relate to them.
But the control card does not see it that way.
In his letter to Kalshi CEO Tarek Mansour and head of regulatory manager and general lawyer Eliezer Mishory, Hendrick said that the company offers a form of investment without having a license.
“Assuming that Kalshi consulted with Nevada legal adviser, your company undoubtedly prevailed that Nevada has a long and great history of strict regulation of gaming activity,” Hendrick said. “Subject to such a strict regulation, the requirement is that a person must be licensed to operate a sports pool in Nevada. A sports pool is a person in “The business of accepting investments in sporting events or other events of any system or method of investing.” A “sporting event” is “an individual race, game, match or competition” or any part of a series of these events. “
Hendrick also noted that investment in election results is a violation of the state’s public policy.
“Kalshi is about offering event -based contracts that constitute a system or method for investing in sporting events and other events,” he said. “By offering event -based contracts in Nevada, Kalshi acts as an unlicensed sports pool.”
Hendrick quoted potential violations of Nevada revised statutes and regulations 22 and 26B in the letter.
This is a developing story. Come back for updates.
Contact Richard N. Velotta at rvelotta@ theplayerlounge.com or 702-477-3893. Follow @Rickvelotta on X.
