Nevada: Senate approves bill against illegal gambling profits

The bill introduces several significant amendments to the state’s existing gaming statutes, with the intent to deter unauthorised gambling and bolster enforcement capabilities.

A central provision in SB256 is the mandatory forfeiture of profits derived from illegal gambling.

If passed into law, anyone convicted of participating in unlawful gaming operations would be required to surrender all profits, gains, gross receipts, or other benefits earned through those activities.

The confiscated funds would then be deposited into Nevada’s State General Fund by the State Treasurer.

This measure is designed to strip illegal operators of financial incentives and direct proceeds back into public resources.

Another critical change proposed in the bill pertains to the treatment of out-of-state gambling entities.

Under current Nevada law, when a company located outside the state accepts a wager from an individual physically located in Nevada, the offence is considered a misdemeanour.

This carries a maximum penalty of six months in jail or a fine of up to $1,000.

In contrast, illegal gambling conducted entirely within Nevada is classified as a Class C felony. SB256 seeks to narrow this disparity by reclassifying the out-of-state violation as a gross misdemeanour.

If enacted, this would double the potential penalty to up to one year in jail and a fine of up to $2,000.

Additional clarity still needed

While the bill does not mention specific platforms or companies, the scope of its impact could extend to both illegal offshore operators and legal grey-area platforms such as sweepstakes casinos and prediction markets.

Several weeks ago, gaming lawyer and analyst Daniel Wallach explained: “While Senate Bill 256 does not specifically call out online sweepstakes casinos by name, (a) public hearing before the Senate Judiciary Committee removed any and all doubt about the focus of the bill.”

The bill makes clear that all unlicensed online gambling operators could be accused of violating state law.

With the exception of limited poker options, Nevada has not licensed any online gaming operator.

Therefore, anything that the state deems to be illegal gambling, which could potentially include both sweepstakes casinos and certain prediction markets, is at risk.

This could have implications for ongoing regulatory efforts, including the state’s current legal dispute with prediction market platform Kalshi.

The Nevada Gaming Control Board (NGCB) has accused the company of operating unlawfully in the state.

The NGCB has increasingly taken a proactive stance in enforcing gaming laws, particularly against unlicensed platforms.

In March, the regulator issued a cease-and-desist order to Kalshi, demanding that the platform stop offering sports prediction markets in the state.

Kalshi has not complied, and the matter remains unresolved. However, the company recently found support from a federal court judge.

Similarly, in July 2024, the NGCB directed Canadian live dealer company Playgon to discontinue its operations for similar reasons.

Additionally, offshore sportsbook and casino operator Bovada exited Nevada in response to mounting regulatory pressure.

This was seen by analysts as indicative of the state’s aggressive enforcement posture.

The bill serves as a signal to the broader gambling industry that Nevada intends to assert its jurisdictional authority over digital gaming transactions involving its residents, regardless of the operator’s physical location.