Nevada is asking a court to hold Kalshi in contempt and fine the prediction market operator $120,000 for every day it continues to let state residents place bets on sports and election contracts. State regulators say Kalshi's IP geofence still isn't working properly, allowing users inside Nevada to trade on live World Cup markets and other contracts that were supposed to be blocked.
The Alleged Violations
In a motion filed this week, Nevada's attorney general's office argued that Kalshi has not complied with a previous court order to restrict access for Nevada residents. The state wants the court to impose a daily fine of $120,000 until the geofencing is fully effective. The filing specifically cites World Cup markets that were live and accessible to Nevada users as evidence of the violation. Regulators say they conducted internal tests from within the state and were able to purchase prohibited contracts, including election-related ones.
Why the Geofencing Order Exists
Kalshi operates a federally regulated exchange for event contracts, but state laws vary. Nevada prohibits certain types of wagering, including on sports and political outcomes. A court had previously ordered Kalshi to block Nevada users from purchasing those contracts. The state alleges that despite that order, Kalshi's geofencing system still fails to identify and block in-state IP addresses. The company's system relies on IP location data to determine where a user is located and to restrict access accordingly.
What the Fine Would Mean
If the court grants the contempt motion, the daily fine of $120,000 could pile up quickly. A week of noncompliance would cost Kalshi $840,000, and a month would exceed $3.6 million. The state is seeking the fine retroactively from the date the alleged violations began, though the motion does not specify a start date. Kalshi has not yet filed a response to the contempt filing.
The Hearing Date
A hearing on the contempt motion is scheduled for May 15. The court will consider whether Kalshi's geofencing efforts meet the standard set in the earlier order. If the judge finds the company in contempt, the daily fines will begin accruing immediately — and the clock is already ticking.
