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The Nevada Gaming Control Board (NGCB) has asked a state court to hold prediction market operator KalshiEX LLC in contempt, alleging the company has failed to comply with a court order requiring it to stop offering certain event contracts to people located in Nevada.
In a filing submitted to the First Judicial District Court for the State of Nevada, regulators said Kalshi has not complied with a May 18, 2026 preliminary injunction directing the company to geofence its operations and prevent access to sports, election, and entertainment-related event contracts from within the state.
The board is seeking a contempt finding and substantial financial penalties, including either disgorgement of what it described as improperly obtained revenue or sanctions of $120,000 per day for violating the court order.
Dispute centers on geolocation controls
According to the filing, Kalshi continues to accept contracts tied to major sporting events despite the court’s directive. Regulators argued that the company is handling hundreds of millions of dollars in wagers on events including the FIFA World Cup, NBA Finals and Stanley Cup Finals while failing to implement geolocation measures that satisfy Nevada requirements.
“Kalshi’s stubborn refusal to comply with the preliminary injunction is causing severe and 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,” the filing stated.
“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. This is an intolerable state of affairs. 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.”
The NGCB said Kalshi has acknowledged spending approximately $190,000 on what regulators described as a proprietary geolocation system that relies solely on internet protocol-based geofencing. The board characterized such technology as unreliable for determining a user’s location and alleged the company has declined to use commercially available geolocation solutions.
“This is just more from the same old Kalshi playbook; delay, delay, delay,” the filing stated. “Rather than comply with the court’s order, Kalshi has taken only a half-hearted and ineffective measure, apparently hoping that the court will deem its meager efforts good enough, so that it can continue profiting at the expense of the state and its citizens.”
Investigation cites continued access in Nevada
Regulators said board investigators were able to purchase contracts through Kalshi’s application involving NBA playoff games, Major League Baseball games, a boxing match, a tennis match and a celebrity wedding while located in Nevada.
The board contends that such offerings remain available despite the court order requiring the company to prevent Nevada residents and visitors from accessing covered event contracts.
“The Court has required Kalshi to stop offering covered event contracts in Nevada. We will continue to vigorously enforce Nevada law to safeguard gaming in our state,” NGCB Chairman Mike Dreitzer said in a statement.
Regulatory position on prediction markets
The NGCB said it has taken action in recent months against other prediction market operators and has successfully restricted all unlicensed prediction markets known to have been operating in Nevada.
According to the board, sports event contracts and certain other event-based contracts constitute wagering activity under Nevada law. As a result, entities offering such products must hold the appropriate gaming licenses in the state.
Regulators further stated that they have determined Kalshi’s operations are unlawful in Nevada and violate several provisions of state gaming statutes, including NRS 463.160, NRS 463.350, NRS 465.086 and NRS 465.092.
The board also reiterated Nevada’s longstanding policy position regarding gaming regulation.
“Nevada’s public policy, as expressed by the Legislature, is that the gaming industry is vitally important to the economy of the state and the general welfare of the inhabitants and therefore must be licensed, controlled, and assisted to protect the public health, safety, morals, good order, and general welfare of the inhabitants of the state,” Dreitzer said.
The court has not yet ruled on the board’s contempt request.