Kalshi Agrees to Block Sports and Other Event Contracts in Nevada

CARSON CITY, Nev.: Kalshi has agreed to strengthen its Nevada geofencing and block access to sports, election and entertainment event contracts. The company must implement the new system by August 12.

The agreement follows a Nevada Gaming Control Board effort to hold Kalshi in contempt over alleged violations of a preliminary injunction. State investigators were repeatedly able to trade contracts covered by the order while physically located in Nevada.

Kalshi Must Introduce Multi-Source Geofencing

Under the joint stipulation approved by the court, Kalshi will use a multi-source geofencing system supplied through GeoComply. The technology must prevent people inside Nevada from entering trades that violate the injunction.

Kalshi acknowledged that investigators completed trades involving sports, elections and entertainment despite the company’s IP-based and residency-based restrictions. The company did not concede that those transactions provided grounds for a contempt order and reserved its legal rights and defenses.

“The Court required Kalshi to stop offering covered event contracts in Nevada, and Kalshi violated that order”, Nevada Gaming Control Board Chairman Mike Dreitzer said. “This agreement will ensure that Kalshi fully complies with Nevada law moving forward, or it will face stiff penalties.”

The restrictions apply to the contract categories covered by the court order rather than Kalshi’s entire exchange. Nevada regulators consider the affected products to be wagering activity that cannot be offered without state gaming authorization.

Agreement Replaces Scheduled Contempt Hearing

The state filed its contempt application in June, and the First Judicial District Court had scheduled a hearing for July 29. The court canceled that hearing after Kalshi and the regulator submitted their agreement.

Kalshi must complete the GeoComply implementation by August 12 or pay Nevada $120,000 for each subsequent day until the work is finished. The agreement alternatively allows the company to submit a sworn explanation for any delay, after which the court could determine whether Kalshi acted with sufficient diligence and set any resulting penalty.

The company must also provide Nevada with progress reports and information about the implementation. The updates will match those supplied to Michigan, although the Nevada agreement states that its terms are separate from proceedings or findings in any other state.

Nevada Continues Prediction-Market Enforcement

The settlement extends a dispute that previously led a Nevada court to temporarily stop Kalsh from offering covered prediction markets. The earlier order prohibited sports, election and entertainment contracts while the state’s case continued.

Kalshi has argued in prediction-market litigation that its contracts fall under the federal authority of the Commodity Futures Trading Commission. Nevada maintains that event contracts resembling wagers remain subject to state gambling laws and licensing requirements.

Dreitzer said the board has taken action against other prediction-market operators and has restricted every unlicensed platform known to have operated in Nevada. The Kalshi agreement gives the regulator a specific compliance deadline while leaving the wider state and federal jurisdiction dispute unresolved.

RELATED TOPICS: Regulation