The Nevada Gaming Control Board has asked a state court to hold Kalshi in contempt of a May order that demanded that Kalshi stop allowing prediction market trades in the state
Gambling regulators in Nevada who have been successful in securing court decisions against Kalshi to this point pressed that advantage on Friday. The Nevada Gaming Control Board (NGCB) asked the Nevada First Judicial District Court to hold Kalshi in contempt of court for alleged violations of the court’s earlier order demanding that Kalshi cease allowing trades of most prediction market contracts in the state.
If the court grants the request, Kalshi could face fines at a minimum. It could prove to be the most aggressive enforcement action a state government has yet taken against a prediction market exchange in the United States.
Regulators seek court intervention to halt contract trading
According to a June 12 release from the NGCB, the Board is asserting that “Kalshi has not complied with the Court’s May 18, 2026, order requiring Kalshi to geofence its operations so that it does not offer or facilitate the offering of any sports-, election-, or entertainment-related event contract to anyone located in Nevada.” As a result, the NGCB “asks the Court to enter a finding of contempt and to impose significant monetary penalties for violation of the Court’s order.”
Originally, the court placed a May 4 deadline on Kalshi’s installation of geolocation restrictions affecting Nevada. However, the NGCB maintains that people in the state continue to have access to trading of sports-related prediction market positions on Kalshi, including contracts related to the ongoing FIFA Men’s World Cup competition.
The NGCB filing with the court specifies a “disgorgement of all ill-gotten gains” request regarding the contempt charge, which could mean hundreds of thousands of dollars in fines for Kalshi if the court agrees. The main point of contention in the motion before the court is the veracity of Kalshi’s compliance with the court order.
NGCB argues that Kalshi’s compliance efforts are deliberately inadequate
The NGCB’s contempt argument lies not in that Kalshi has ignored the court order but rather that Kalshi’s efforts to comply with the order are intentionally insufficient.
“Kalshi’s own submission reveals why this is so: Kalshi has spent only a small amount of money ($190,000) on a homegrown ‘solution’ that relies only on internet protocol (IP) addresses (which are notoriously unreliable for determining users’ locations). Accurate commercial geofencing solutions are readily available, but Kalshi refuses to use them here, contending that its homegrown solution is good enough.”
The petition to the court further states that “on eight separate occasions across four days…Board investigators successfully purchased prohibited event contracts on Kalshi’s platform while physically located in Nevada.” In all of those instances, “Kalshi’s platform accepted and recorded the trades without blocking, restricting, or otherwise preventing the transactions based on the investigators’ Nevada location.”
Failing an immediate finding of contempt, the NGCB asks the court to schedule a hearing for Kalshi to show the court why it should not face contempt penalties. A finding of contempt would represent the furthest that any state government has gone against a prediction market exchange to date.
Nevada officials on the leading edge of restricting event contract trading
Nevada is far from the only state to attempt to restrict prediction market trading within its borders, but it is the most successful in that regard so far. Ohio has secured favorable court rulings but hasn’t yet exercised any regulatory powers over Kalshi.
In other states, litigation has been more favorable to prediction market operators. As one example, a federal court has blocked enforcement actions taken by Arizona officials following Arizona Attorney General Kris Mayes’ filing of criminal charges against Kalshi.
Other state governments like New Jersey have issued cease-and-desist demands to Kalshi and similar platforms, while a few, such as Minnesota, have passed new laws. However, non-compliance with those demands and statutes has yet to produce any serious consequences in those states.
Nevada might be the first to cross that threshold of imposing legitimate consequences for non-compliance with a state court order.
