Kalshi Faces Contempt Motion from Nevada Regulators Over Geo-Blocking Failure
Nevada regulators have taken legal action against prediction market operator Kalshi, seeking a contempt order over what they describe as ongoing violations of a court-mandated geofence. The Nevada Gaming Control Board (NGCB) filed its motion with the First Judicial District Court, asserting that Kalshi continues to provide event-based contracts to Nevada residents despite a court order to block such access.
The core issue involves contracts related to sports, elections, and entertainment activities that Nevada law considers gambling and therefore requires a valid gaming license, which Kalshi does not possess. On May 18, 2026, the court instructed Kalshi to implement geofencing technology to prevent Nevada-based users from accessing and trading in these event contracts. Geofencing is a location-based technology designed to restrict access from certain areas. However, the NGCB claims that Kalshi has not adhered to this injunction. In the regulator’s filing, they argue that the continued availability of these contracts within Nevada’s borders violates the court order and jeopardizes the state’s regulatory efforts.
The NGCB stated: “Kalshi’s stubborn refusal to comply with the preliminary injunction is causing severe and ongoing harm to Nevada, its finances, and its citizens.”
Nevada law mandates that contracts on sports and other events be licensed activities. The regulators allege that Kalshi is unlawfully operating within the state by offering these products without proper authorization.
Investigations revealed that users could purchase contracts on the Kalshi app for high-profile events such as NBA playoff games, Major League Baseball matches, a boxing bout, a tennis match, and even a celebrity wedding. The filing also notes that the platform processes significant daily betting volumes linked to major international sporting events.
The NGCB elaborated: “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. 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.”
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Licensed sportsbooks in Nevada use advanced geolocation technology that cross-verifies a user’s location through multiple data points before accepting bets. The regulators allege that Kalshi has declined to adopt similar measures. Instead, the company reportedly invested $190,000 in a proprietary solution relying on IP address detection. US regulators describe this method as “notoriously unreliable” and consider it an inadequate safeguard.
The NGCB criticized: “This is just more from the same old Kalshi playbook; delay, delay, delay. Rather than comply with the court’s order, Kalshi has only taken half-hearted and ineffective steps, seemingly hoping the court will accept its minimal efforts so it can continue profiting at the expense of the state and its citizens.” In its motion, Nevada authorities are requesting a formal contempt finding against Kalshi for failing to follow the court order. Such a ruling could lead to penalties or other enforcement actions. The state also asks the court to order “disgorgement of all ill-gotten gains” or, alternatively, impose fines of $120,000 for each day the company remains in violation. Mike Dreitzer, Chairman of the Nevada Gaming Control Board, commented: “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.” Kalshi Nevada Regulators
