Kalshi accuses Nevada regulator of federal law breach in geofencing dispute
Kalshi says Nevada regulator violated federal law by misrepresenting residences during geofencing tests, as daily fines loom.
Prediction market operator Kalshi has pushed back against Nevada's gaming regulator, alleging that the regulator violated federal law in its enforcement actions. The dispute centres on a geofencing order that requires Kalshi to block users in Nevada from placing trades on its platform.
Nevada regulators have sought daily penalties of $120,000, claiming Kalshi failed to implement a complete geofencing solution by a court-ordered deadline. According to a court filing, board investigators successfully placed nine trades on Kalshi's mobile app while connected to cellular networks in Nevada, just one day after the deadline passed.
Kalshi responded by stating that it had hired GeoComply, a vendor licensed by Nevada's gaming regulator at the state's request, and that it kept the state updated throughout the process. The company's lawyers argue that Nevada investigators misrepresented their residences to Kalshi, which they say violates federal law. They also claim that at least one investigator circumvented Kalshi's own blocking measures.
The legal battle stems from a preliminary injunction issued by a Nevada judge in April, which barred Kalshi from offering prediction contracts in the state without obtaining a gaming license. The Nevada courts did not immediately respond to requests for comment outside normal business hours on Saturday.