Predictions markets platform Kalshi has been embroiled in various legal battles with the Nevada Gaming Control Board (NGCB) for many months, and the two sides recently came to clash once again as the latter asked a state court to hold the former in contempt.
What Does the NGCB Allege?
In a filing submitted to Nevada’s First Judicial District Court, the NGCB alleged that Kalshi failed to implement the required geofencing measures for its operations. According to the regulator, Kalshi has failed to comply with a May 18 court order prohibiting it from offering sports betting in the state.
The NGCB argued that Kalshi’s continued refusal to comply with the preliminary injunction is inflicting significant and ongoing harm on Nevada, its finances, and its residents. They contended that the company is taking in hundreds of millions of dollars in wagers on events such as the NBA Finals, Stanley Cup Finals, and FIFA World Cup while failing to adhere to the same geofencing requirements imposed on licensed sportsbooks.
According to the filing, this places regulated operators at a competitive disadvantage and undermines the state’s gaming industry. Citing the NGCB’s investigation and what it described as Kalshi’s own admissions of noncompliance, regulators urged the court to hold the company in contempt, arguing that stronger enforcement measures are necessary to secure compliance with the court order.
What Does the NGCB Ask From the Court?
The NGCB asked the court to hold Kalshi in contempt and impose substantial financial penalties for violating the order, including either the forfeiture of all profits earned through the alleged violations or fines of $120,000 per day. In a statement, recently appointed board chair Mike Dreitzer said the court had ordered Kalshi to stop offering covered event contracts in Nevada. He emphasized that the regulator would continue to aggressively enforce state law to protect the integrity of Nevada’s gaming industry.
The NGCB maintains that sports event contracts, as well as certain other event-based contracts, qualify as wagering under Nevada law and therefore require appropriate licensing and regulatory oversight. According to Dreitzer, Nevada lawmakers have long recognized the gaming industry as a critical pillar of the state’s economy and public welfare. That is why it is subject to licensing, regulation, and oversight aimed at protecting public health, safety, morality, order, and the broader interests of residents.
In other recent news related to Kalshi, the company’s recent deal with global sports data company Sportradar has shaken the industry, sparking much speculation on what impact it could have on sports betting.