The Nevada Gaming Control Board has finalized an agreement with Kalshi, the prediction market operator, mandating compliance with a court order by August 12. Failure to adhere will result in a hefty daily fine of $120,000.
This agreement comes in response to a preliminary injunction issued by the First Judicial District Court in Nevada on May 18, which prohibited Kalshi from offering or facilitating specific contracts within the state. Investigators found that users could still access these prohibited contracts on Kalshi's platform, prompting the Board to pursue a contempt ruling.
As part of the settlement, a hearing that was set for Wednesday has been canceled. Board Chair Mike Dreitzer announced that Kalshi has committed to implementing a comprehensive geofencing solution from a third-party provider to block users in Nevada from accessing the restricted contracts.
Kalshi has already initiated the geofencing implementation, which must be finalized by the August 12 deadline. If the company fails to meet this timeline, it will incur a daily penalty of $120,000 until the system is fully operational. Additionally, Kalshi is required to provide the Board with regular updates on its progress.
Dreitzer emphasized the importance of this agreement, stating, “This will ensure that Kalshi adheres to Nevada law moving forward, or face significant penalties. We will continue to enforce Nevada law rigorously to protect our gaming industry.”
In federal court, Kalshi has argued that it falls under the jurisdiction of the Commodity Futures Trading Commission (CFTC) instead of state regulators, a stance that has received support from the CFTC.
The Gaming Control Board has taken action against other prediction markets recently and has successfully curtailed all known unlicensed operators in Nevada.
The court documents seeking a contempt ruling highlighted that Kalshi's non-compliance with the injunction was causing ongoing damage to Nevada's economy and its citizens.
“Kalshi is processing hundreds of millions in bets daily on events like the NBA Finals and FIFA World Cup, while simultaneously harming the gaming industry by not adhering to the same regulations as licensed sportsbooks that implement geofencing,” the filing stated.
“This situation is unacceptable,” it continued. “Given the Board’s investigation and Kalshi’s own admissions of violating the court order, the court must hold Kalshi in contempt. Without this action, Kalshi will not understand the seriousness of the matter.”