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The Nevada Gaming Control Board has reached an agreement with Kalshi requiring the prediction market operator to comply with a court order by August 12 or face a $120,000 daily penalty.
The agreement follows a preliminary injunction issued by the First Judicial District Court in Nevada on May 18, prohibiting Kalshi from offering or facilitating certain contracts in the state. According to the Board, investigators were repeatedly able to enter prohibited contracts on Kalshi’s platform despite the court order, prompting regulators to seek a contempt ruling.
As part of the agreement, a hearing scheduled for Wednesday has been vacated.
Board Chair Mike Dreitzer said Kalshi has agreed to immediately implement a robust, multi-source geofencing solution provided by a third-party commercial provider to prevent users within Nevada from accessing the prohibited contracts.
Kalshi has already begun implementing the geofencing system and must complete it by Aug. 12. Failure to meet the deadline will result in a $120,000 daily penalty until implementation is complete. The company will also provide periodic progress updates to the Board.
“This agreement will ensure that Kalshi fully complies with Nevada law moving forward, or it will face stiff penalties,” Drietzer said. “We will continue to vigorously enforce Nevada law to safeguard gaming in our state.”
Kalshi has maintained in federal court that it falls under the jurisdiction of the Commodity Futures Trading Commission (CFTC) rather than state regulators, a position supported by the CFTC.
The Gaming Control Board said it has taken action in recent months against other prediction markets and has successfully restricted all known unlicensed prediction market operators in Nevada.
The court filing seeking a contempt order argued that Kalshi’s failure to comply with the preliminary injunction was causing ongoing harm to Nevada, its finances, and its citizens.
“Every day, Kalshi takes in hundreds of millions in wagers on such events as the NBA Finals, the Stanley Cup Finals, and FIFA World Cup. At the same time, Kalshi is severely harming the gaming industry, because it refuses to follow the same rules as its licensed sportsbook competitors, who actually geofence,” it stated.
“This is an intolerable state of affairs,” it added. “In light of the Board’s investigation and Kalshi’s own admissions that establish its violation of the court order, the court shall hold Kalshi in contempt. Kalshi will never get the message otherwise.”