• The Nevada Gaming Control Board (NGCB) has asked the First Judicial District Court of Nevada to hold Kalshi in contempt, alleging the company failed to comply with the 18 May geofencing order issued in the regulator’s ongoing dispute with the platform
• According to the filing, the court replaced earlier residency language with a stronger requirement that Kalshi block anyone physically located within Nevada from accessing covered event contracts
• The regulator says Kalshi chose to build its own geolocation system rather than adopt a third-party tool, and tested it by asking family and friends in Nevada to attempt wagers through the platform
• Court filings indicate Kalshi spent approximately $190,000 developing, implementing and testing its in-house geofencing solution, a figure that sits awkwardly with arguments the company made in other litigation
• The contempt application lands days after Kalshi announced a new market integrity framework and against a backdrop of intensifying national scrutiny of event contracts

The Geofencing Dispute Has Become the Centrepiece of Nevada’s Case Against Kalshi

The Nevada Gaming Control Board has filed a contempt application against Kalshi in the First Judicial District Court of Nevada, alleging that the prediction-market operator has not complied with a court order requiring it to block users physically located in the state from accessing sports, election and entertainment event contracts. The regulator maintains that those contracts amount to wagering activity under Nevada law, and that Kalshi’s operations violate multiple provisions of the state’s gaming statutes.

According to NGCB Chairman Mike Dreitzer, the court has required Kalshi to stop offering covered event contracts in Nevada, and the regulator intends to continue enforcing state gaming law to protect that boundary. The agency’s underlying position is that an event contract tied to a sporting or political outcome is functionally a bet, and that federal listing under commodity rules does not displace state authority over gambling.

The contempt motion centres on the design and testing of Kalshi’s geofencing. According to the filings, Judge Jason Woodbury amended the original injunction on 18 May, replacing what was described as easily circumvented residency language with stronger wording prohibiting Kalshi from offering the contracts to persons physically located within Nevada. The change matters because residency-based restrictions can be defeated by users with out-of-state account information who are nonetheless playing from within the state.

Court filings indicate Kalshi opted to develop its own geolocation and geofencing system rather than use an established third-party provider, and tested it by asking family and friends in Nevada to attempt to place wagers through the platform. The regulator argues that, where an operator chooses to build its own technology, thorough independent testing becomes more important, not less. The state’s filing characterises the company’s approach as reliance on a homegrown solution with ad hoc testing through family and friends rather than implementation of a proven third-party product.

Cost is the other strand of the dispute. According to the filings, Kalshi spent approximately $190,000 developing, implementing and testing its internal geofencing system. That figure sits awkwardly against earlier arguments the company is reported to have made in other US litigation, where it suggested that implementing geofencing through a third-party provider could cost up to tens of millions of dollars annually. The contrast forms part of the regulator’s broader contention that the company has not made a serious investment in keeping Nevada users off the platform.

The contempt proceedings arrive only days after Kalshi announced a new market integrity framework. According to the company, last week’s reforms introduced enhanced surveillance, risk scoring for markets, employer disclosure requirements for participants in higher-risk contracts and additional insider-trading controls, following recommendations from its independent Surveillance Audit Committee. The roll-out came amid increased scrutiny of prediction markets across sports, politics and global events.

The Nevada filing also lands inside a broader regulatory contest. Last week, the American Gaming Association criticised a Commodity Futures Trading Commission rulemaking that would establish a federal framework for reviewing event contracts, including those tied to sporting events. AGA President and CEO Bill Miller said the proposal “makes a mockery of congressional intent” and went against a bipartisan coalition of 41 attorneys general, legislators across the country, and the 81% of voters who, in the association’s framing, view prediction markets as backdoor sportsbooks evading state and tribal law. The CFTC has defended its proposal as a transparent process for assessing whether event contracts involve activities prohibited under the Commodity Exchange Act, including gaming and conduct unlawful under federal or state law. The proposal does not prohibit sports-related event contracts outright, but signals closer scrutiny for highly specific micro-betting markets, player-injury contracts and wagers tied to officiating decisions.

The $190,000 Figure Is the Compliance Detail That Could Define the Case

The single most consequential fact in the regulator’s filing is the reported cost of Kalshi’s in-house geolocation work, set against the company’s own previous arguments about the expense of third-party geofencing. If a thorough, third-party-grade system genuinely costs tens of millions of dollars a year, then a $190,000 in-house build is unlikely to deliver an equivalent level of assurance, and the regulator’s contention that testing has been inadequate has obvious force. If the in-house system is in fact robust, then the company’s earlier figures look strategic rather than empirical. Either reading is uncomfortable for Kalshi, and either reading helps Nevada’s case that the geofencing obligation has not been met in substance.

State Authority and Federal Listing Are on a Collision Course That Won’t End in Nevada

The deeper question this filing exposes is jurisdictional. Nevada is asserting that a CFTC-listed event contract tied to a sporting outcome is wagering under state law and that the state can require operators to geofence its residents out of the product. Kalshi’s presence in Nevada, and the parallel disputes unfolding in other states, indicates that the federal framework for prediction markets has not yet settled how to handle this overlap. The CFTC rulemaking the AGA has criticised will not resolve the question on its own. Until the federal and state frameworks reach a more stable accommodation, the enforcement gap that this contempt filing illustrates will keep recurring, and operators that rely on light-touch in-house compliance will keep finding themselves in front of state courts.

Integrity Reforms Will Not Substitute for Compliance With a Court Order

The timing of the contempt filing, days after Kalshi announced its new market integrity framework, draws a sharp line that is worth taking seriously. Surveillance enhancements, risk-scored markets and insider-trading controls speak to one set of regulatory concerns. A specific, state-level requirement to geofence physically located residents speaks to another, and the announcement of the former does not discharge an obligation under the latter. Nevada’s case turns on whether Kalshi has complied with a court order, not on the strength of its general compliance posture. The contempt application is therefore not just a technical follow-up. It is a test of how state regulators intend to police the prediction-market boundary while the wider federal question continues to be argued.