Kalshi is set to stop offering contracts in Nevada.
The Nevada Gaming Control Board announced last week it reached an agreement with Kalshi for the prediction markets operator to stop offering sports, election and entertainment contracts in the state by August 12. The two have been in a legal battle February over what the NGCB alleges is illegal gambling.
If Kalshi does not stop its offerings by that date, it will risk a fine of $120,000 per day. According to the NGCB, the operator has agreed to a third-party geofence to prevent anyone within Nevada from participating in prohibited contracts.
“This agreement will ensure that Kalshi fully complies with Nevada law moving forward or it will face stiff penalties,” NGCB Chair Mike Drietzer said. “We will continue to vigorously enforce Nevada law to safeguard gaming in our state.”
Court ordered prediction markets stop
A district court in Nevada entered a preliminary injunction prohibiting Kalshi from offering contracts in May. That followed a temporary restraining order in March and an initial preliminary injunction in April.
The May order prohibits the operator from offering sports event, election-related and entertainment-related contracts.
Despite that order, the NGCB has been able to trade contracts on Kalshi. Initially, the operator attempted to restrict sports event contracts in Nevada based on IP addresses. In turn, the regulators asked the court to hold Kalshi in contempt of court.
A hearing scheduled for Wednesday has been canceled following the agreement between.
Kalshi legal battles
Earlier this month, a judge in Michigan ordered Kalshi to geofence its products from the state.
The Commodity Futures Trading Commission pushed its federal regulatory powers and told Kalshi it could not comply with the Michigan order. The CFTC said complying with the state would interfere with the agency’s interest in ensuring “market integrity and fair, orderly, and efficient market operations.”
Also earlier this month, a judge in New York denied Kalshi a preliminary injunction against the state. Judge Analisa Torres said New York gambling laws apply to the operator’s sports event contracts.
Nevada leads on prediction markets
Along with the lawsuit against Kalshi and enforcement actions against other prediction markets, Nevada lawmakers are also spearheading efforts against the industry.
Rep. Steven Horsford introduced a bill last week that would prohibit prediction markets from offering casino-style games and sports event contracts.
The NGCB warned gambling operators last year about offering prediction markets. In turn DraftKings and FanDuel pulled applications from the state. The state’s hardline stance on the industry has also played a part in legacy operators like MGM and Caesars from entering the prediction markets game.
