Kalshi’s IP Geofence Still Lets Nevada Users Buy Banned Contracts as State Seeks $120,000 a Day

A Geofence That Doesn’t Hold

On June 12, the Nevada Gaming Control Board (NGCB) asked the First Judicial District Court in Carson City to hold Kalshi in contempt, alleging the prediction market has flouted a May 18 order to geofence its platform so Nevada residents cannot trade sports-, election-, or entertainment-related event contracts.

Rather than license an established geolocation provider, Kalshi leaned on a “home-grown” system keyed to IP addresses, which the state calls plainly inadequate. To prove this assessment, investigators bought prohibited contracts on eight occasions between May 28 and June 1 while physically located in Nevada – markets on a tennis match, NBA playoff games, MLB games, a soccer match and the Los Angeles mayoral election. They 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 penalty Nevada wants is unusual in its arithmetic: $120,000 a day, which the board derived as 1/50 of Kalshi’s estimated daily fee revenue, for every day the geofence stays porous. Kalshi, which has argued that proper geofencing is “prohibitively expensive” despite it being routine for every licensed U.S. sportsbook, blamed a glitch and said the board never reached out before filing its contempt request.

Kalshi has spent months casting itself as the compliance adult in prediction markets – its head of enforcement, Robert DeNault, publicly told rival Polymarket that “enough is enough” over offshore users and weak controls. Now, Nevada’s filing suggests Kalshi’s own guardrails are no sturdier when under serious scrutiny.

There is also the question of whether the CFTC’s new federal rulebook can shield Kalshi from state gaming law in the future. Nevada is the only court in the country to have actually ordered the platform to block sports contracts – a key point of contention during the home-soil World Cup that is set to generate $50 billion in bets. NGCB Chairman Mike Dreitzer signaled no retreat: “We will continue to vigorously enforce Nevada law to safeguard gaming in our state.” The court has not yet ruled.

For now, a Nevada resident can allegedly still open Kalshi, pick a World Cup market, and buy a contract, a judge said, which should be out of reach.