Kalshi has agreed to implement third-party geolocation technology in Nevada after reaching an agreement with the Nevada Gaming Control Board (NGCB) aimed at preventing state residents from accessing certain prediction markets.
Under the joint stipulation filed in Carson City, the prediction market operator must have the new system in place by Aug. 12, 2026. If Kalshi misses the deadline, it will face a civil penalty of $120,000 per day. The agreement also requires the company to provide regular project updates.
The arrangement follows legal proceedings after Nevada argued that Kalshi’s event contracts covering sports, elections and entertainment amount to gambling activity requiring a state license.
GeoComply to Replace Existing Blocking System
Court filings show Kalshi hired GeoComply to develop the geofencing solution, which will remain in place while the preliminary injunction is active.
Previously, Kalshi relied on an internally developed system using IP addresses and residency information. Court documents state the company spent less than $200,000 developing the technology.
Nevada investigators reported they could still access restricted contracts despite those safeguards. The NGCB said investigators “repeatedly” succeeded in placing trades on markets that should have been unavailable.
The regulator then sought to hold Kalshi in contempt of court, although a scheduled hearing has now been canceled following the agreement.
NGCB Chair Mike Dreitzer said: “This agreement will ensure that Kalshi fully complies with Nevada law moving forward, or it will face stiff penalties,” NGCB Chair Mike Dreitzer said in a statement. “We will continue to vigorously enforce Nevada law to safeguard gaming in our state.”
Kalshi Maintains Its Legal Arguments
Although Kalshi acknowledged investigators successfully placed trades after its IP-based controls were introduced, the company said it does not accept the regulator’s legal position.
The filing states: “Kalshi acknowledges that, notwithstanding Kalshi’s implementation of IP-based and residency-based trading blocks, the state’s investigators have successfully placed trades in sports-, election-, and entertainment-related event contracts during the pendency of the court’s amended PI order. For avoidance of doubt, Kalshi does not concede that any such trades amount to cause for an order of contempt, and Kalshi reserves all rights and defenses in this aspect.”
Michigan Dispute Continues
Michigan also secured a court order blocking Kalshi from offering sports contracts and requiring GeoComply technology. The company faces the same Aug. 12 deadline there, with potential fines of $500,000 per day for noncompliance.
The broader dispute reached a House Agriculture Subcommittee hearing after US Commodity Futures Trading Commission Chairman Michael Selig instructed Kalshi to disregard the Michigan order. Witnesses called for stronger coordination between state and federal regulators.
Robert Schwartz, a partner in the derivatives practice at Morgan, Lewis & Bockius and a former CFTC general counsel, said:
“I think we’d all like to see better cooperation. The explosion of litigation is not something that we have seen before, just as the order that came out from the commission. It had been 46 years since the commission had issued any order under its emergency authority. So we are in an extraordinary situation.”
Source:
“Joint stipulation and [proposed] order”, gaming.nv.gov, July 24, 2026
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