Nevada is looking to impose stricter penalties on illegal gambling in a bill that passed unanimously in the state’s Senate and now sites before the House. Sponsored by Sen. Rochelle Nguyen, SB256 proposes updates to Nevada’s gaming laws. It includes requiring those found guilty of illegal gambling to forfeit any profits they made from the activity to the state. The increased penalties also apply to out-of-state entities offering illegal gambling services to individuals in Nevada.
Although the legislation does not explicitly name platforms and operators, it could affect sweepstakes casinos in addition to illegal offshore operators. The bill could also help the state in its legal battle with Kalshi, a prediction market platform.
SB256 strengthens Nevada’s enforcement against illegal gaming
SB256 expands on existing penalties under Nevada law, which already calls for penalties such as felonies and fines up to $50,000. The new bill requires those convicted of engaging in unlawful gaming to forfeit any profit, gain, gross receipt, or benefit from that activity. The State Treasurer would then deposit the forfeited money into the State General Fund.
Another key update is the reclassification of offenses originating from out of state. Under current law, an out-of-state entity accepting a wager from someone physically located in Nevada is only guilty of a misdemeanor, whereas illegal gambling taking place entirely in-state is a Class C felony. As a misdemeanor, the penalty for offering illegal gambling from out of state was only a fine of up to $1,000, or up to six months in jail. SB256 would elevate the out-of-state offense to a gross misdemeanor and double the potential penalties, making them up to one year in prison and a fine of up to $2,000.
One of the bill’s primary objectives is strengthening Nevada’s ability to pursue out-of-state operators who unlawfully target state residents. It will give more tools to the Nevada Gaming Control Board (NGCB), which has not hesitated to send cease-and-desist letters to operators it considers to be conducting illegal activity.
Last month, it demanded that Kalshi cease activity in the state. However, the legal battle between the two is ongoing and the prediction market will be unlikely to comply voluntarily. In July 2024, the NGCB ordered Playgon, a Canadian live dealer company, to shut down. Moreover, amid regulatory pressure, Nevada was among the first states where the offshore operator Bovada ceased operations.
SB256 may not end illegal gaming, but other states could take note
SB256 won’t stop illegal gaming in Nevada. However it will help the state in sending a message to individuals or entities conducting unlawful activities from outside the state. That may inspire similar action in other states.
A recent example was last year when the Michigan Gaming Control Board sent a cease and desist letter to Bovada. By the end of the year, the offshore operator had left 11 other states, and it was unavailable in 17.
A similar scenario could unfold for sweepstakes casinos. If one regulator, such as the NGCB, charges a sweeps platform, other state regulators will likely take notice. For example, last month, Connecticut suspended High 5 Games’ content provider license after it determined that the company’s sweeps platform, High 5 Casino, had conducted illegal activity. Less than a week later, Maryland’s regulator sent a cease-and-desist letter to High 5 Casino. The platform has since left the two states, along with several others.
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