Kalshi Could Face $120,000 Daily Fines in Nevada Case

Nevada regulators challenge Kalshi’s compliance

In a late-Friday court filing in Carson City, the Gaming Control Board argued that Kalshi continued to offer prohibited prediction market contracts after the court-ordered deadline.

According to the regulator, state gaming investigators were able to purchase multiple event contracts covering sports, elections and entertainment from within Nevada using mobile devices. The board said these transactions "should not have been possible under the court's order."

The agency also claimed that Kalshi "has profited enormously from its continued violations of Nevada law" and urged the court to impose penalties of $120,000 for each day of noncompliance.

The dispute centers on the geofencing measures Kalshi agreed to implement in July to prevent users located within Nevada from accessing its prediction market.

Kalshi disputes investigators’ trades

As part of its agreement with Nevada authorities, Kalshi committed to deploying "a robust, multi-source geofencing solution provided by a third-party commercial provider." The company selected GeoComply, a Nevada-licensed technology provider, to support the restrictions.

However, the Gaming Control Board said its agents were able to complete trades despite those safeguards. When the company was informed about the transactions, investigators were reportedly told they had been using a "previous version" of the Kalshi application that was not covered by geofencing.

Kalshi's attorneys offered a different account of the investigation. In a Friday letter to the board, they argued that investigators were able to trade only after allegedly misrepresenting their residency to Kalshi and, in at least one case, deliberately circumventing restrictions designed to block Nevada users.

Kalshi calls Nevada action “a vindictive waste”

Kalshi General Counsel Rick Heaslip sharply criticized the regulatory action, describing the board's lawsuit as "a vindictive waste of taxpayer dollars at the bidding of casinos."

Heaslip maintained that Kalshi had taken extensive steps to comply with Nevada's requirements.

The company "went above and beyond to geofence Nevada as requested," he said, adding that Kalshi had hired a state-approved provider and "updated Nevada every step of the way, with no response."

Gaming Control Board rejects Kalshi’s claims

The Nevada Gaming Control Board rejected the company's allegations in a statement published on its website Saturday.

The regulator characterized Kalshi's accusations as "baseless" and argued that they do not change the company's failure to meet the agreed deadline.

According to the board, Kalshi "cannot obscure the fact it missed an agreed-upon deadline to comply with Nevada law." The agency added that the company's repeated failures to comply with court orders left regulators with no alternative but to notify the court of the alleged noncompliance.

Prediction markets face broader Nevada legal battle

The dispute involving Kalshi forms part of a broader legal confrontation over the operation of prediction markets in Nevada and their relationship with the state's established gaming regulatory framework.

Nevada, Kalshi and two other prediction market operators are currently awaiting a decision from the 9th U.S. Circuit Court of Appeals. The ruling could determine whether Nevada regulators can maintain their effort to prevent the companies from operating in the state.

For the gaming industry, the case could have wider implications for the regulatory treatment of event contracts covering sports and other outcomes, particularly as prediction markets increasingly overlap with activities traditionally regulated as sports betting and gaming.

The immediate question, however, is whether Kalshi complied with the court's August 12 deadline and whether the company will be exposed to the $120,000-per-day penalties requested by the Nevada Gaming Control Board.