Nevada Pushes for Kalshi Contempt Order Over Geofencing

The legal battle between Kalshi and Nevada has taken a sharper turn this week. The Nevada Gaming Control Board has asked a court to hold Kalshi in contempt. The regulator says Kalshi ignored a court order that should have kept its products out of the state. According to the new filing, Kalshi missed a May 18 deadline to geofence Nevada players out of its markets. On top of forcing compliance, the Board wants the court to impose significant monetary penalties.

Kalshi operates as a federally regulated prediction market. Users buy and sell contracts tied to the outcome of real-world events, including sports games, elections and award shows. Those sports contracts are exactly what put Kalshi on a collision course with Nevada gambling regulators.

Why Nevada Says Kalshi Broke the Rules

Nevada and Kalshi have been here before. Earlier this year, the Board moved to block Kalshi’s event contracts across the state. A Nevada court agreed and issued a preliminary injunction. That injunction gave Kalshi until May 18 to put geofencing in place. Once active, the geofencing would stop Nevada-based players from reaching Kalshi’s sports, election and entertainment markets.

The new filing argues that Kalshi has not taken its obligations seriously. Nevada investigators say they rechecked Kalshi’s platform repeatedly after the May 18 deadline passed. They found that people physically inside the state could still log in and place trades. The Board says this happened again and again, even after its first enforcement filing against Kalshi.

NGCB chairman Mike Dreitzer addressed the situation directly.

“The Court has required Kalshi to stop offering covered event contracts in Nevada,” he said. “We will continue to vigorously enforce Nevada law to safeguard gaming in our state.”

His comments leave little doubt about how seriously the Board is treating Kalshi’s continued presence in the state.

For Kalshi, the stakes keep climbing. A contempt finding would carry real weight beyond a courtroom scolding. The Board has also explicitly asked for monetary penalties on top of compliance. If the court agrees, Kalshi could face fines layered on top of stricter enforcement of its Nevada obligations.

Inside Kalshi’s $190,000 Geofencing Fix

At the centre of the dispute is how Kalshi tried to comply, and how little it spent doing so. According to the filing, Kalshi built its own geofencing tool rather than buying a ready-made one. The company spent only about $190,000 on it. That tool relies solely on IP addresses to estimate where a user happens to be.

The Board calls this approach notoriously unreliable. A VPN can mask an IP address in seconds. Shared networks and misregistered addresses create further gaps. Relying on IP data alone leaves room for Nevada users to slip through, so the Board calls it inadequate.

Commercial geofencing services exist that combine GPS, Wi-Fi positioning and other signals. These tools are common across the regulated gambling industry. The Board says Kalshi has ready access to them.

Kalshi has stuck with its in-house system anyway. The filing suggests the company believes its homegrown solution is good enough. Nevada’s investigators say it plainly is not. That gap between what Kalshi considers sufficient and what Nevada demands sits at the heart of the case.

What Comes Next for Kalshi in Nevada

The court now must decide whether Kalshi’s conduct amounts to contempt. Nevada has already shown it is willing to draw a hard line. The original injunction made clear that Kalshi could not offer its covered event contracts to Nevada residents, full stop.

If the court sides with the Board, Kalshi could face fines on top of tighter geofencing enforcement. Court-ordered oversight of how Kalshi verifies user locations could follow too. That outcome would send a signal to prediction market operators eyeing similar products in regulated states such as Nevada.

Why the Case Matters Beyond Nevada

This case matters well beyond Nevada’s borders too. Prediction markets sit in a grey area between federal commodities rules and state gambling law. Several states are watching how the Kalshi dispute plays out in Nevada.

A contempt ruling against Kalshi in Nevada would hand state regulators a strong precedent. It would tell every prediction market platform that Nevada court orders carry real weight. Cutting corners on compliance comes at a cost.

Kalshi has not publicly responded to the new filing yet, but the Board has made its position clear. Compliance is not optional, and Nevada intends to keep pushing until Kalshi follows the order in full. For Kalshi, the message from Nevada is simple: comply fully or face the consequences in court.