Nevada seeks $120K daily fine after Kalshi geofence fails

The Nevada Gaming Control Board asked a court on June 12 to hold Kalshi in contempt, saying the prediction market failed to block Nevada residents from buying sports, election and World Cup contracts after a May 18 order to geofence the state.

In its filing, the board said investigators using devices inside Nevada were able to purchase prohibited contracts on eight occasions between May 28 and June 1. The purchases included markets tied to a tennis match, NBA playoff games, Major League Baseball games, a soccer match and the Los Angeles mayoral election. The board said repeat tests from June 8 to 11 found World Cup markets still reachable from inside Nevada as the tournament began.

Nevada’s filing says Kalshi relied on an in-house geolocation system keyed to IP addresses rather than a licensed geolocation provider. The board contends that method allowed access from within the state and did not meet the court’s May 18 order to block sports-, election- and entertainment-related event contracts.

The board seeks $120,000 per day for each day the geofence remains porous. Nevada arrived at that figure by taking one‑fiftieth of Kalshi’s estimated daily fee revenue and applying that amount as a daily penalty, the filing states.

Kalshi responded that the access issues resulted from a glitch and said the board did not contact the company before filing the contempt motion. The company has previously argued that implementing a geofence at scale is prohibitively expensive. Kalshi’s head of enforcement, Robert DeNault, has publicly said “enough is enough” regarding offshore users and weak safeguards.

A judge noted during proceedings that a Nevada resident could still open Kalshi, select a World Cup market and buy a contract that should have been blocked under the court’s order. Mike Dreitzer, chairman of the Nevada Gaming Control Board, said the agency will “continue to vigorously enforce Nevada law to safeguard gaming in our state.” The court has not yet ruled on the contempt request.

The case raises legal questions about how Nevada’s gaming law will interact with a new federal rulebook from the Commodity Futures Trading Commission for prediction markets. For now, Nevada is the only jurisdiction to issue a judicial order specifically requiring a platform to block sports contracts, and regulators have moved to enforce that order through the contempt filing and the daily penalty calculation.