Nevada Regulator Says Kalshi Should Pay $120,000 Per Day for Noncompliance With Court Order
Nevada's Gaming Control Board says Kalshi missed an Aug. 12 geofencing deadline and should pay $120,000 a day until it fully blocks Nevada users from its platform.
Nevada’s Gaming Control Board told a Carson City court in a late Friday filing that prediction market operator Kalshi has failed to comply with a judge’s order to stop offering sports, election and entertainment contracts in the state, and it wants the company to pay $120,000 for every day it remains out of compliance. The filing accuses Kalshi of missing an Aug. 12 deadline to fully implement geofencing that would block Nevada users from the platform.
The dispute is the latest flashpoint in the ongoing legal battle between state gaming regulators and prediction market operators like Kalshi, which have argued their event contracts fall under federal commodities law and are therefore exempt from state gambling licensing requirements. Nevada, along with several other states, disagrees and has moved aggressively to shut the products down within its borders.
How the Geofencing Deadline Was Missed
According to the board’s filing, Kalshi agreed in July to a settlement rather than face a contempt finding, promising to implement “a robust, multi-source geofencing solution provided by a third-party commercial provider” to prevent anyone within Nevada’s boundaries from entering restricted contracts. The company brought on GeoComply, a Nevada-licensed geolocation technology vendor, to handle the blocking.
Despite that agreement, state investigators say they were able to place multiple event contracts in the banned categories from within Nevada using mobile phones on Aug. 13, the day after the compliance deadline passed. The board said in its filing that Kalshi had “profited enormously from its continued violations of Nevada law,” and that when investigators flagged the trades, they were told they had been running a “previous version” of the app that was not yet subject to geofencing. Nevada Attorney General Aaron Ford’s motion argued that Kalshi’s Aug. 9 app update, pushed just three days before the deadline, left too little time for the rollout to reach all users, since updates can take up to seven days to fully distribute.
Kalshi Pushes Back
Kalshi disputed the board’s account in a statement, with general counsel Rick Heaslip calling the enforcement effort “a vindictive waste of taxpayer dollars.” The company alleges that Nevada investigators misrepresented their residences and actively worked to circumvent its blocking measures — including having at least one investigator bypass the geofencing protections directly — which Kalshi’s lawyers argue violated federal law in the process of trying to prove noncompliance.
The control board, in an unsigned statement posted to its website, called Kalshi’s counter-accusations “baseless,” saying the company “cannot obscure the fact it missed an agreed-upon deadline to comply with Nevada law” and that its “consistent failures to comply with the court’s orders left the board with no choice but to advise the court of Kalshi’s noncompliance.”
What Happens Next
The standoff traces back to an April preliminary injunction from Nevada’s First Judicial District Court barring Kalshi from offering sports, election and entertainment event contracts without a state gaming license. Kalshi and other prediction market operators are simultaneously awaiting a ruling from the 9th U.S. Circuit Court of Appeals that could shape how far states can go in regulating these products, adding another layer of uncertainty to an already contentious legal fight. For now, it’s up to the Carson City court to decide whether the $120,000-a-day penalty sticks, and whether Kalshi’s federal-law counterclaims carry any weight. The outcome could set an important precedent as more states weigh how to handle whether prediction markets are legal to operate without traditional gambling licenses.
Bettors watching the prediction market space closely can track how platforms like Kalshi stack up against rivals in states where they continue to operate legally, as the regulatory picture across the country remains far from settled.