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Nevada law already requires criminal penalties for operating a gambling business without a license but a new bill in the state’s Senate imposes additional financial consequences for people convicted of such charges. The proposal mandates that any money earned through unlicensed gambling be forfeited to the state. It also raises the severity classification for some gambling-related crimes.
The bill does not mention any specific entities that might be violating Nevada law in their operation but it does come as the state has taken action against Kalshi over its sports-related event contracts. Should Nevada enact the proposal, it might have a chilling effect for other companies offering gambling-adjacent products that comply with federal law but aren’t expressly licensed by Nevada authorities.
SB256 increases the risks for unlicensed gambling
Nevada Sen. Rochelle Nguyen filed SB256 on Feb. 27. The bill is currently with the Nevada Senate’s Judiciary Committee.
That committee has not yet taken any action on the bill but did consider it during its March 12 hearing. The bill does not change the legal status in Nevada of any activity.
Rather, it requires the forfeiture of any proceeds from unlicensed gambling, diverting any funds seized to the state’s general fund. SB256 also “increases the penalty for accepting, receiving or allowing certain persons to accept or receive certain wagers under certain circumstances from a misdemeanor to a gross misdemeanor.”
In Nevada, a simple misdemeanor carries possible consequences of as much as six months in jail and/or a fine of up to $1,000. A gross misdemeanor, however, allows for up to a year in jail and a maximum fine of $2,000.
Should SB256 become law, it would give prosecutors in the state authority to pursue unlicensed gambling in new ways. Regulators in Nevada are currently engaged in similar action.
SB256 comes amid Kalshi interruption demand
The Nevada Gaming Control Board (NGCB) is currently engaged in an enforcement action against Kalshi, a company that maintains a predictions exchange market. The NGCB has stated its opinion that Kalshi’s sporting event-related prediction contracts are tantamount to unlicensed gambling and originally gave Kalshi through March 14 to stop accepting contract payments from people in Nevada.
The NGCB has since granted Kalshi’s request for an extension and the final result of the enforcement action is still pending. That situation could be a precursor to broader enforcement if SB256 becomes law.
Nevada could other states in tightening online gambling restrictions
Nevada isn’t the only US state where legislators are attempting to introduce new penalties for or further define illegal online gambling. There are online casino play into their respective state codes.
Some of these bills, unlike Nevada’s, specifically mention social and sweepstakes-based online casinos as the target of the intended enforcement. Others take a broader approach like Nevada but regardless of the language, enforcement will ultimately come down to state prosecutors, not gambling regulatory bodies if any of these bills become law.
Gambling regulatory bodies can refer investigations to prosecutors for criminal charges but most of their penal powers are reserved for licensees. Typically, the most severe penalties that such bodies can levy are the revocations of licenses and bans on certain individuals receiving gaming licenses in the future.
The age of SB256 into law in Nevada would emphasize the need to prosecute unlicensed gambling in the state. The prospect of capturing revenue from such activity also acts as an incentive, meaning that companies accepting wagers from Nevadans would need to reassess their operations.
