The Nevada Gaming Control Board filed a contempt motion on June 12 against prediction market Kalshi, alleging the platform violated a May 18 court order to geofence Nevada residents from trading sports, election, and entertainment event contracts. Board investigators successfully purchased banned contracts—including markets on tennis, NBA playoffs, MLB games, soccer, and the Los Angeles mayoral election—on eight occasions between May 28 and June 1 while physically located inside Nevada, then repeated the test from June 8 to 11 as World Cup markets remained accessible. The state is seeking a penalty of $120,000 per day, calculated as one-fiftieth of Kalshi's estimated daily fee revenue, for every day the geofence remains inadequate. Kalshi relied on a home-grown IP address system rather than licensing an established geolocation provider, a choice the NGCB calls plainly insufficient despite geofencing being routine for every licensed U.S. sportsbook. The filing marks a sharp reversal for Kalshi, whose head of enforcement Robert DeNault publicly criticized rival Polymarket over weak compliance controls, and Chairman Mike Dreitzer stated the board will continue to vigorously enforce Nevada law to safeguard gaming in the state.
Investigators Purchased Banned Contracts on Eight Occasions Between May 28 and June 1
To test Kalshi's geofence, Nevada Gaming Control Board investigators bought prohibited contracts on eight occasions between May 28 and June 1 while physically inside Nevada. The purchases included markets on a tennis match, NBA playoff games, MLB games, a soccer match, and the Los Angeles mayoral election. The board repeated the test from June 8 to 11, with World Cup contracts among those still reachable from inside the state as the tournament opened. The contempt filing submitted on June 12 documented each transaction as evidence that Kalshi's system failed to block access as ordered by the court on May 18.
Nevada Calculated Penalty as One-Fiftieth of Kalshi's Estimated Daily Fee Revenue
Nevada is seeking $120,000 per day in penalties, an amount the Gaming Control Board derived by dividing Kalshi's estimated daily fee revenue by fifty. The penalty would apply for every day the geofence remains porous. The arithmetic ties the sanction directly to the platform's revenue stream rather than using a flat statutory fine. The court has not yet ruled on the contempt motion or the proposed penalty amount.
Kalshi Used IP-Based System and Blamed a Glitch
Kalshi implemented a home-grown geofencing system keyed to IP addresses rather than licensing an established geolocation provider used by every licensed U.S. sportsbook. The platform has argued that proper geofencing is prohibitively expensive. In response to the contempt filing, Kalshi blamed a glitch and said the Nevada Gaming Control Board never reached out before filing its request. Robert DeNault, Kalshi's head of enforcement, had publicly told rival Polymarket that enough is enough over offshore users and weak controls. Chairman Mike Dreitzer stated the board will continue to vigorously enforce Nevada law to safeguard gaming in the state.
FAQ
What did the Nevada Gaming Control Board file on June 12?
The Nevada Gaming Control Board filed a contempt motion on June 12 against Kalshi, alleging the platform violated a May 18 court order to geofence Nevada residents from trading sports, election, and entertainment event contracts.
How did Nevada calculate the $120,000 daily penalty?
Nevada calculated the penalty as one-fiftieth of Kalshi's estimated daily fee revenue, applying the amount for every day the geofence remains inadequate.
Why did Kalshi's geofence fail according to the Nevada Gaming Control Board?
The board found Kalshi's home-grown IP address system inadequate after investigators successfully purchased banned contracts on eight occasions between May 28 and June 1 while physically inside Nevada, demonstrating the geofence did not block access as ordered.
