Nevada Senate gives unanimous backing to capture illegal gambling profits

The Nevada Senate has given its full backing to new legislation aimed at seizing the proceeds of illicit gambling. 

Sponsored by Sen. Rochelle Nguyen, Senate Bill 256 (SB256) is designed to make important tweaks to the existing gambling framework in the Silver State, and to present formidable deterrents against underground operators. 

SB256 will strengthen the legal system with more punitive enforcement options available. 

Following unanimous assent in the Senate, the proposed bill will now pass through the House of Representatives before it can be enacted.

One of the key pillars of SB256 is the mandatory forfeiture of all profits gained from illegal betting activity. There will also be a focus on out-of-state operators enticing users within Nevada.

If approved, SB256 would compel anyone found to have participated in illegal gaming to relinquish all profits, as well as any related benefits, gains, and gross receipts.

The drive is aimed at reducing the allure of these operators by removing their financial incentives, with the confiscated monies being sent directly to the State General Fund.

The new bill would also shake up how out-of-state operators are dealt with. 

Under the existing laws in Nevada, when a company from outside the state jurisdiction accepts a bet from a user within the state, the offense is considered a misdemeanor with the risk of a maximum penalty of six months in jail or a fine of up to $1,000. 

Conversely, illegal gambling taking place entirely within the state (no outside operators) is currently considered a Class C felony. 

Lawmakers believe that the disparity needs urgent attention, with SB256 set to upgrade the out-of-state breach as a gross misdemeanor. It would also effectively double the potential penalty of up to 12 months in jail and a fine of up to $2,000. 

The bill has not named or targeted specific platforms, but its remit could reach illegal offshore operators as well as sweepstakes casinos and prediction markets. 

The latter is something of a grey area, including the ongoing high-profile Kalshi case, with state legislators locked in a legal dispute with the Lower Manhattan-based entity. 

Nevada’s Gaming Control Board had slapped the company with a cease-and-desist order, accusing it of operating unlawfully in the state, but Kalshi has successfully obtained an injunction in the ongoing case. 

A few weeks ago, gaming lawyer and analyst Daniel Wallach detailed:

“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.”

SB256 is unambiguous that all unlicensed online gambling operators could be accused of violating state law.

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