Nevada Seeks Daily Fines as Kalshi Blames Investigators for Geofencing Workaround
Kalshi says Nevada investigators misrepresented their residence and “actively worked to circumvent” restrictions that blocked them from trading after the Aug. 12 deadline.
Prediction market platform Kalshi has accused Nevada gaming regulators of breaking federal law, as the two sides trade blows over whether the company properly geofenced the state by a court-ordered deadline.
The latest filing came on Aug. 14, when the Nevada Gaming Control Board (NGCB) told a state court in Carson City that Kalshi had failed to comply with a judge’s order to stop offering event contracts relating to sports, entertainment, and elections in the state by an Aug. 12 deadline.
The board asked the First Judicial District Court to impose daily penalties of $120,000 plus the state’s legal fees. It argued that the company “has profited enormously from its continued violation of Nevada law.”
According to the filing, board investigators placed nine separate trades on Kalshi’s mobile app while connected to cell networks inside Nevada a day after the deadline. State prosecutors say the court’s order should have prevented investigators from placing any of those trades.
Kalshi sent a letter to the NGCB saying Nevada investigators could only place the trades because “they had violated federal law by misrepresenting their residence to Kalshi, and, in at least one instance, actively worked to circumvent the Kalshi restrictions that blocked the investigator from trading.”
Kalshi Escalates the Rhetoric
Kalshi’s General Counsel and Chief Regulatory Officer, Rick Heaslip, escalated the matter further in a public statement on Saturday. He said the company “went above and beyond to geofence Nevada as requested.”
He outlined how Kalshi hired a state-approved vendor and kept regulators informed throughout the implementation. In its letter to the NGCB, Kalshi said it provided regular updates on the system’s progress and rollout.
Still, Nevada did not ask Kalshi or its geofencing provider any questions about the implementation before investigators attempted to trade the day after the deadline.
In a social media post, he accused the NGCB of breaking federal law:
GeoComply is the vendor in question; it operates as a Nevada-licensed location verification firm. According to Kalshi, agents circumvented the restrictions by using a “prior version” of the Kalshi app that “was not subject to geofencing.”
NGCB Says Kalshi Missed the Deadline
The board didn’t let Kalshi’s accusation go unanswered. In a statement, the NGCB called the accusations “baseless.” The regulator said Kalshi “cannot obscure the fact it missed an agreed-upon deadline to comply with Nevada law.”
The regulator added that Kalshi’s “consistent failures to comply with the court’s orders” left it no choice but to advise the court of the alleged noncompliance. The court will now decide whether Kalshi failed to implement adequate geofencing by the deadline or whether investigators deliberately circumvented restrictions that otherwise worked as intended.
Back-and-Forth Legal Battle Since March 2025
The Friday filing marks the latest development in a long-running dispute between Kalshi and Nevada regulators.
The dispute began in March 2025 when the state issued a cease-and-desist letter to Kalshi. They claimed the company was offering unlicensed sports betting. Kalshi sued the board in response.
Kalshi initially prevailed, with U.S. District Judge Andrew Gordon granting the company a preliminary injunction in April 2025. But Gordon reversed course in November, dissolving the injunction and ruling that Nevada could enforce its gambling laws against Kalshi.
The company appealed to the Ninth Circuit, where the case remains pending.
The conflict intensified in early 2026, when Nevada filed a civil enforcement action against Kalshi in state court in February. Kalshi removed the case to federal court, but it was remanded to state court in Carson City, where Nevada secured a temporary restraining order in March and a preliminary injunction in April barring the contracts at issue.
Nevada regulators concluded that Kalshi’s initial compliance efforts were inadequate and filed a motion asking the court to hold the company in contempt, saying Kalshi continued to “flagrantly violate” the injunction.
The Nevada Supreme Court denied Kalshi’s emergency bid to stay the injunction in early July. Kalshi then struck a deal to ward off a formal contempt finding.
The NGCB announced on July 24 that Kalshi would deploy a comprehensive geofencing solution from GeoComply by the August 12 deadline, a deal that removed the need for the scheduled contempt hearing.
Older Kalshi App Allowed Sports Trades in Michigan
Kalshi could face further regulatory scrutiny in Michigan after testing found users could continue trading sports contracts through an older version of its app. The state had ordered the company to implement geofencing and use GeoComply by August 12.
Gaming industry outlet InGame tested the restrictions and found that the block applies only to users who have installed the latest version of the Kalshi mobile app. The company does not require users to install the update.
The InGame reporter, who had an account registered in Indiana, placed bets on sporting events from within Michigan before manually updating the app. Once the reporter installed the update, the geolocation controls kicked in, blocking all in-state sports trades. The outlet reported that the app didn’t display a message prompting users to install the update.
The Michigan testing provides a possible explanation for how Nevada investigators were able to trade despite Kalshi’s implementation of GeoComply.
Kalshi says Nevada investigators used a prior version of its app that was not subject to geofencing. InGame similarly found that an older version of the app continued to permit sports trading in Michigan until it was manually updated.
Whether that represents a failure by Kalshi to adequately implement the court-ordered controls or a deliberate circumvention of otherwise functioning restrictions by Nevada investigators is now at the center of the dispute.
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