Kalshi Settles Nevada Contempt Case — Agrees to GeoComply Geofencing as Hearing Is Canceled
Kalshi and the Nevada Gaming Control Board have reached a settlement agreement ending the state's contempt proceedings against the prediction market platform. Under the deal, Kalshi must implement a GeoComply-powered multi-source geofencing system to block Nevada residents from accessing its sports, election, and entertainment markets by August 12 — or pay $120,000 per day. The contempt hearing scheduled for July had been triggered by evidence that NGCB investigators successfully purchased prohibited contracts on Kalshi's platform eight times in four days while physically inside Nevada.
The Nevada Gaming Control Board and Kalshi have agreed to a joint settlement that cancels the state's contempt proceedings against the prediction market platform. The deal, announced July 24, requires Kalshi to implement a multi-source geofencing system provided by GeoComply — one of the largest commercial geolocation vendors in the US gaming industry — and to have it fully operational by August 12, 2026. If Kalshi misses that deadline, it will be subject to $120,000 in daily fines until compliance is confirmed. NGCB Chair Mike Dreitzer said Kalshi had already begun working with GeoComply on implementation at the time the agreement was announced.
The contempt proceedings arose from what the NGCB described as systematic failures in Kalshi's geofencing implementation after a May 18 court order required the company to block Nevada users from accessing sports, election, and entertainment event contracts. Board investigators subsequently purchased prohibited contracts on the Kalshi platform eight times across four days — May 28, 30, 31, and June 1, 2026 — while physically located inside Nevada, defeating Kalshi's in-house geofencing system. The system Kalshi built in response to the original May court order cost approximately $190,000 and relied primarily on IP address data. GeoComply's Senior Vice President Chad Kornett testified at the July contempt hearing that commercial-grade geofencing solutions can typically be implemented in one to two weeks — directly undercutting Kalshi's earlier argument that compliant geofencing was technically prohibitive.
The GeoComply requirement is significant beyond the Nevada case. Kalshi simultaneously faces an August 12 geofencing deadline in Michigan — imposed July 13 after the state extended its temporary restraining order and raised the daily fine to $500,000 — and the Michigan compliance plan also involves GeoComply's technology. The convergence on GeoComply as the mandated vendor across two states reflects both its dominant position in the US gaming geolocation market (it is used by virtually all state-licensed sports betting operators) and the court record showing that Kalshi's proprietary IP-based blocking tool was inadequate in practice. What constitutes compliant geofencing in a state-court context has now effectively been defined: a commercial multi-source system from a recognized geolocation vendor, not an in-house tool built to a cost target.
The Nevada settlement resolves one strand of what had become the most adversarial regulatory confrontation in Kalshi's history. Nevada was the first state where geofencing enforcement reached the contempt stage — ahead of Michigan, where the original June 19 federal court ruling was followed by state-court enforcement that escalated separately. The settlement does not end the underlying litigation: the Nevada preliminary injunction remains in force and the NGCB's case against Kalshi continues. What it ends is the immediate contempt standoff, giving Kalshi a defined compliance path rather than an imminent judicial finding of contempt. Whether the GeoComply system performs as required — blocking Nevada residents while not blocking traders who happen to be passing through the state or using VPNs — will be tested when the NFL regular season begins in September, the highest-volume period for sports event contracts on any platform.
Operators mentioned in this article
Recent updates
Kalshi's Parlays Drive Back-to-Back $5B Days — and Hand Critics Their Strongest Argument
Kalshi traded a record $5.33 billion on November 7 and $5.36 billion on November 8, with multi-leg parlay-style 'combos' making up roughly 75% of both days' volume. Its 30-day volume topped $100 billion. But the parlay dominance cuts against the platform's legal defense: parlays are a quintessential sportsbook product, and the American Gaming Association has told the Second Circuit that parlays make up about two-thirds of Kalshi's volume and should be treated as sports bets. The implied house edge on 10-plus-leg combos is around 25%, undercutting the argument that these are neutral financial instruments rather than gambling.
Cruz Bill Would Require State or Tribal Approval for Sports Contracts — a Bipartisan Legislative Threat Emerges
Senator Ted Cruz, who chairs the Senate Commerce Committee, is preparing a bill that would bar federally regulated prediction markets from offering gambling-tied event contracts, including sports, unless a state or tribal government authorizes them. It would not ban the contracts nationwide but would require platforms to obtain approval jurisdiction by jurisdiction, resembling state-by-state sportsbook regulation. The proposal arrives as Democrats take control of both chambers after the midterms, creating a potential bipartisan reckoning: a Republican committee chair and a newly skeptical Democratic majority both eyeing restrictions on a sector that had relied on federal protection.
CFTC Tells Platforms to Stop Geofencing States — Directly Colliding With State Court Orders
The CFTC issued an interpretation on November 5 of its 'impartial access' core principle, telling regulated exchanges including Kalshi and Polymarket to drop state-by-state geographic blocks within 30 days or explain why they cannot. The demand collides head-on with existing state court orders that require the platforms to geofence: Washington ordered Kalshi to geofence in August, and Michigan ordered it to use licensed geolocation to block the state in September, with a $500,000 daily fine for violations. Chairman Michael Selig framed the interpretation as a uniformity requirement. The platforms are now caught between a federal demand to unblock states and state court orders to block them.