Nevada regulators reject prediction market expansion

The Nevada Gaming Control Board accepted license application withdrawals from DraftKings and Flutter Entertainment following a dispute over sports event contracts. The board declared that these companies intend to engage in unlawful activities by attempting to offer prediction markets within the state. This regulatory move responds to the Ninth Circuit Court of Appeals ruling that sports-related contracts do not constitute swaps under federal commodities law. While prediction market operators claim the Commodity Futures Trading Commission holds jurisdiction, forty-four states argue these products function as sports betting disguised in financial terms. The Ninth Circuit Court of Appeals denied requests for injunctive relief from Kalshi, Crypto.com, and Robinhood, which all sought to prevent the Nevada Gaming Control Board from shutting down their sports-related event contract offers in the state. Nevada remains one of several states, including New Jersey and Ohio, that issued warnings to sports betting license holders regarding these products. FanDuel CEO Peter Jackson stated that the company needs to protect its interests, while DraftKings CEO Jason Robins noted that prediction markets represent a significant opportunity.

Skill-based definitions in esports law

Nevada regulates esports under Nev. Rev. Stat. Ann. § 463.830, which allows wagering on esports if the events meet specific supervision and integrity criteria. Legal classification for such contests depends on whether the outcome results from skill or chance. Most jurisdictions apply either the Predominance Test, requiring skill to exceed 50% of the outcome, or the Material Element Test, requiring skill to be the dominant factor. If a platform fails these tests, regulators can classify the activity as an illegal lottery. Kentucky defines esports competitions under KRS § 528.010(5), excluding traditional casino games like poker from these protections. Maryland recognizes esports as lawful contests under Md. Criminal Law Code Ann. § 12-114 if skill is the dominant element. Arkansas provides a framework under A.C.A. § 23-118-102 where paid esports tournaments are exempt from gambling classification if entry fees are cash and prizes are disclosed. In Washington, a court ruled in Double Down Interactive v. Benson that virtual currency and chips count as things of value. Does the shift toward prediction markets eventually force a federal standard for skill in video game competitions?

Comparing DraftKings and industry rivals

DraftKings provides a wide market selection for sports and niche events. New users receive $150 in bonus bets after spending $5 or more on a deposit. This offer distributes $50 bonus bet tokens every seven days over a 14-day period.

FanDuel provides a $250 bonus bet offer for users who wager $5 over five consecutive days. BetMGM offers a first bet bonus of up to $1,500 if the initial wager loses. BetMGM also includes the MGM Rewards program for users to redeem points at hotels and restaurants. DraftKings includes features such as early payouts and injury protections, though the interface feels cluttered when navigating secondary markets. Users can also use the Early Exit program to receive cash credits equal to the original stake if a player is injured. DraftKings also runs an NBA King of the Court contest where a $10,000 jackpot awaits players who answer 15 questions correctly.

Legal battles over consumer protection

The One Big Beautiful Bill Act passed in July limits gambling loss deductions to 90 percent starting in 2026. This change means gamblers who break even over a year might still face a tax bill on income they never earned. Lawmakers introduced the FAIR BET bill and the FULL HOUSE bill to restore the 100 percent deduction.

DraftKings faces legal action in Pennsylvania where plaintiffs claim the company cultivated gambling addictions to increase profits. One plaintiff, Avi Setton, lost more than $350,000 between 2020 and 2024 after the company kept his account open despite his request for closure in 2020. The Massachusetts Gaming Commission fined DraftKings $450,000 in July 2025 for accepting illegal credit card-funded bets. In Connecticut, the Department of Consumer Protection required DraftKings to return more than $3 million to 7,000 consumers following investigations into deposit match promotions. Specifically, deposit match promotions promising to match deposits up to $2,000 require users to wager both the deposit and bonus amounts 10 to 15 times within seven days, often totaling $40,000 in required wagering. New Jersey’s Division of Gaming Enforcement fined DraftKings $10,000 in 2021 for sending promotional materials to 11 individuals on the self-excluded list.

Dr. Kavita Fischer’s lawsuit details how DraftKings assigned her a VIP host despite her sending emails stating she should quit gambling. After her upgrade to VIP status in December 2022, she made 446 deposits totaling $208,130 and lost over $153,000 in four months. The lawsuit claims her VIP host sent her six emails containing enticements to increase deposits even after she expressed concern about her gambling. A $100 winning bet made with real money returns approximately $191 after the 9 percent vig is deducted, whereas a $100 bonus bet win returns only about $91. Matthew Harner also allegedly created accounts despite being on Pennsylvania’s permanent casino self-exclusion list. If you experience issues with account closures or promotional terms, you should review your eligibility for compensation.