Sports Event Contracts Violate Public Policy Sports Event Contracts violate public policy by: • Infringing upon Tribal and State sovereignty to regulate gaming. • Circumventing State Law and Regulations designed to protect the public and to ensure integrity in sports betting, if not outright making it illegal (Texas,Utah,Hawaii, Alabama, among others). • Undermining Tribes’ bargained for exclusivity to operate sports betting pursuant to Class III Gaming compacts. • Diminishing the market share and cutting off sports betting revenue that supports state and Tribal governments and citizens.
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Recent Developments – State Enforcement Actions • At least six states—Illinois, Maryland, Montana, Ohio, Nevada, and New Jersey—have issued cease-and-desist letters to registered exchanges offering sports event contracts. • These cease-and-desist letters order these registered exchanges, such as Kalshi, Crypto.com, and Robinhood, to cease offering sports event contracts due to violations of: State gaming civil and criminal laws; and State public policy. • Kalshi is presently litigating the validity of Nevada’s and New Jersey’s cease-and-desist orders. • At least two other states—Connecticut and Massachusetts—are investigating registered exchanges offering sports event contracts for violating state gaming laws.
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