Kalshi faces contempt motion over Nevada order
Table of contents
- The Nevada Gaming Control Board filed a contempt motion on June 12, claiming Kalshi has failed to adequately geofence its platform following a May 18 court order.
- The NGCB alleges Kalshi spent only $190,000 on an in-house, IP-based geolocation tool it describes as “notoriously unreliable.”
- Regulators are seeking either a disgorgement of all ill-gotten gains or a daily sanction of $120,000.
The Nevada Gaming Control Board (NGCB) has escalated its legal battle with prediction market operator Kalshi, filing a motion on June 12 in state court seeking a contempt finding and significant financial penalties for alleged non-compliance with a geofencing order.
The motion, filed in the First Judicial District Court for the State of Nevada, claims Kalshi has failed to implement adequate geolocation controls as required by a May 18, 2026 preliminary injunction.
The NGCB alleged that Kalshi has not complied with the court’s order requiring it to geofence its operations so that it does not offer or facilitate any sports-, election-, or entertainment-related event contracts to anyone located in Nevada.
Wagers pile up
The NGCB’s filing argued that Kalshi is taking in hundreds of millions of dollars in wagers daily on events including the NBA Finals, the Stanley Cup Finals, and the FIFA World Cup. The regulator characterized the situation as causing “severe and ongoing harm” to Nevada, its finances, and its residents.
The Board requested the court either order a disgorgement of all ill-gotten gains, or impose a sanction of $120,000 per day for each day of non-compliance with the injunction.
NGCB chairman Mike Dreitzer said:
“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.”
IP solution falls short
Central to the NGCB’s contempt argument is the nature of Kalshi’s geolocation approach. The Board said Kalshi has spent only $190,000 on a homegrown solution that relies solely on internet protocol (IP) addresses, describing that approach as “notoriously unreliable” for determining users’ physical locations.
The NGCB noted that accurate commercial geofencing solutions are readily available, but that Kalshi refuses to use them, contending its own solution is adequate.
IP-based blocking is widely considered the weaker of the two primary geolocation methods. Unlike device-based geolocation, which can pinpoint a user’s location to within a few feet and detect remote access attempts, IP verification relies on database matching and is susceptible to circumvention.
Earlier in the case, reports emerged that Nevada users could still access restricted Kalshi markets simply by changing their account profile to an out-of-state address.
Months of legal pressure
The contempt motion is the sharpest escalation yet in a dispute that began in March 2026. Judge Jason Woodbury issued the initial temporary restraining order against Kalshi on March 20, 2026, before granting the NGCB’s request for a preliminary injunction on April 3. The court ruled Kalshi’s event contracts are indistinguishable from unlicensed sports betting under Nevada law.
Nevada is not the only state applying pressure. Massachusetts was the first state to sue Kalshi, in September 2025, followed by Michigan, Washington, Wisconsin, Rhode Island, Arizona, and New Mexico, all of which have filed civil or criminal actions against the platform. Ohio’s Casino Control Commission separately fined Kalshi $5 million for operating without a sports gaming licence.
The outcome of the contempt motion could set a precedent for how aggressively other state regulators pursue non-compliant platforms, and how much weight court injunctions carry when competing federal jurisdictional arguments remain unresolved.
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