Nevada gaming regulators have requested a court impose fines of $120,000 per day against prediction market operator Kalshi, alleging the firm failed to block state residents from accessing prohibited event contracts after a court-mandated August deadline. The enforcement action could result in penalties approaching $600,000 if the court accepts the state’s calculation through mid-August.
Under a July agreement, Kalshi committed to deploying GeoComply geoblocking technology to prevent Nevada users from trading sports, election and entertainment contracts by August 12. State investigators claim they successfully accessed the platform and placed trades after that cutoff, including through an older application version not subject to the restrictions. Nevada regulators argue the company profited from ongoing violations of state law.
Kalshi disputes the characterization, asserting that investigators circumvented its blocking measures by misrepresenting their location and using false information in violation of federal law. The company maintains its geofencing controls functioned properly and that any access resulted from deliberate evasion by testers rather than compliance failures.
This marks the second contempt proceeding between Nevada and Kalshi over geoblocking enforcement, with a June action also seeking $120,000 daily penalties remaining unresolved. Meanwhile, the broader jurisdictional question of whether Nevada can regulate Kalshi’s prediction markets awaits a Ninth Circuit ruling, leaving both the fundamental regulatory authority and immediate compliance disputes in parallel litigation.
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FXnCO Insight
** Brokers relying on geoblocking technology should ensure comprehensive coverage across all platform versions and maintain detailed compliance documentation, as regulators increasingly test enforcement through active attempts to circumvent restrictions rather than accepting technical implementations at face value.
Source: Finance Magnates