The Nevada Gaming Control Board has told a state court that Kalshi failed to comply with the preliminary injunction barring it from offering certain event contracts to people located in Nevada.
The court filing revives a fight that had appeared headed toward a geofencing compromise. State regulators argue Kalshi’s address-based and IP-based controls did not satisfy an order requiring the company to block sports, election and entertainment contracts within Nevada by an agreed upon Aug. 12 date.
The NGCB said in a Friday filing that it wants Kalshi on the hook for the $120,000 daily fine for not complying with the order.
Kalshi disputes that conclusion, maintaining it has taken adequate steps to comply while the broader litigation continues.
Nevada says Kalshi kept access open
The dispute traces back to the April preliminary injunction, which required Kalshi to stop offering or facilitating covered event contracts in Nevada. The court later clarified that the restriction applies to people physically located in the state, not just customers with Nevada addresses.
Nevada regulators say their investigators repeatedly accessed Kalshi from inside the state and bought prohibited contracts, including markets tied to NBA playoff games, MLB games, boxing, tennis and a celebrity wedding.
The NGCB argues that Kalshi initially relied on an address block and then put in place a homegrown system based largely on IP addresses. That approach, regulators said, is insufficient because IP data cannot reliably establish a user’s physical location and can be bypassed.
Why the compliance issue matters
The NGCB position is that the company must deploy commercial-grade geolocation, the same kind of technology used across the regulated U.S. sports betting market, rather than relying on account information or IP addresses.
Kalshi had previously agreed to implement geofencing by Aug. 12. Under that framework, missing the deadline could trigger $120,000 in daily payments to the state until compliance is achieved, or require Kalshi to submit a sworn explanation of why it could not complete the implementation.
Nevada is now asking the court to find Kalshi in contempt, impose sanctions for every day of noncompliance and require the company to reimburse the NGCB’s costs and attorney fees.
Background on Nevada-Kalshi case
Nevada sued Kalshi after concluding its sports contracts amounted to unlicensed gaming under state law. The First Judicial District Court initially issued a temporary restraining order in March, then entered a preliminary injunction covering sports, election and entertainment contracts.
Judge Jason Woodbury found Kalshi’s products fell within Nevada definitions of a sports pool and percentage game and rejected, at least at the injunction stage, Kalshi’s argument that Commodity Futures Trading Commission oversight categorically preempts state gaming enforcement.
Nevada remains one of the clearest state-level tests for prediction markets. The state’s position is straightforward: regardless of the federal derivatives label, a product that allows customers to trade on sporting outcomes needs a Nevada gaming license.
What comes next
The immediate question is whether the court accepts Nevada’s view that Kalshi’s controls are ineffective and holds the company in contempt. A finding of noncompliance would add financial pressure and potentially force Kalshi to use more robust location technology.
The larger jurisdiction fight is still unresolved. Nevada is one of the most advanced cases, but it is part of a broad state-by-state conflict over whether sports event contracts are federally regulated derivatives or unlicensed gambling.
Other state battles
The CFTC has tried to resolve the conflict by suing states and defending its claimed exclusive jurisdiction over prediction markets, but courts are still reaching different conclusions.
- New Jersey: Kalshi secured its biggest appellate win when the 3rd Circuit held that the Commodity Exchange Act preempted New Jersey gambling enforcement against Kalshi’s sports contracts. The state could seek Supreme Court review, making it a likely vehicle for the national jurisdiction fight.
- New York: A federal judge denied Kalshi’s request to block enforcement of New York gambling laws, finding the CEA did not preempt the state’s rules as applied to sports event contracts. New York subsequently sued Kalshi, and the CFTC responded with an emergency order directing the exchange to continue operating.
- Michigan: A state judge temporarily blocked Kalshi sports contracts, after Michigan argued the products were unlicensed internet sports betting. The dispute later focused on whether Kalshi’s account and location controls sufficiently complied with the order.
- Minnesota: A federal judge paused Minnesota’s first-in-the-nation statutory ban on prediction markets, finding the CFTC and operators were likely to prevail at least in part on federal-preemption claims.
- Utah: A federal judge granted the state summary judgment, concluding Utah can enforce its anti-gambling laws against Kalshi’s sports event contracts. It was the first final federal judgment squarely rejecting Kalshi’s federal-preemption position.
- Washington: Courts have also allowed Washington regulators to proceed against Kalshi.
- Massachusetts, Wisconsin and tribal cases: Kalshi has faced state enforcement litigation in states like Massachusetts and Wisconsin, while tribal governments in California, New Mexico and Wisconsin have brought their own challenges centered on tribal gaming rights and alleged unlawful wagering.
