- Kalshi must finish a GeoComply geofencing rollout in Nevada by Aug. 12 or face a $120,000 daily penalty.
- The stipulation lets Kalshi submit a sworn affidavit explaining any delay instead of paying that daily penalty.
- Kalshi acknowledged state investigators placed prohibited trades but did not concede those trades warrant a contempt order.
- Nevada is entitled to the same implementation updates Kalshi gives the state of Michigan.
CARSON CITY, Nev. – A Nevada judge signed an agreement Friday in the state’s contempt case against Kalshi that lets the prediction market answer a missed Aug. 12 geofencing deadline with a sworn affidavit rather than the $120,000-a-day penalty regulators publicized.
Both sides filed the joint stipulation on July 23 in State of Nevada ex rel. Nevada Gaming Control Board v. KalshiEX LLC, Case No. 26 OC 00050 1B, in the First Judicial District Court in and for Carson City. Its first operative term vacated the contempt hearing the court had set for July 29.
The Penalty Is Not Automatic
The Nevada Gaming Control Board’s July 24 announcement said Kalshi must complete implementation by Aug. 12 “or pay the Board a penalty of $120,000 per day until implementation is complete.”
The stipulation is written differently. Paragraph 5 gives Kalshi a choice if it misses the date. It will “either (1) pay to the State $120,000 each day thereafter until the implementation is complete, or (2) submit to the Court a sworn affidavit of a Kalshi and/or GeoComply representative explaining why implementation of the geofencing solution remains incomplete.”
If Kalshi takes the second path, the state gets an opportunity to be heard and the court then decides whether the company “failed to show that it acted with sufficient diligence.” Only on that finding may Kalshi be subject to penalties, and the stipulation leaves the amount to the court rather than fixing it at $120,000. The daily figure binds only if Kalshi chooses to pay instead of explain.
GeoComply Is Named Only In The Filing
Paragraph 4 carries the obligation itself. Kalshi, the filing states, “will implement a multi-source geofencing solution provided through GeoComply designed to prevent anyone located within the geographic boundaries of the State of Nevada from placing trades in violation of the preliminary injunction” by no later than Aug. 12.
The board’s announcement described the fix as coming from “a third-party commercial provider” without identifying GeoComply. The vendor’s name appears only in the filing.
Kalshi Reserved Its Contempt Defenses
The board said Kalshi admitted that investigators entered prohibited contracts after the injunction took effect. The filing carries that acknowledgment and a limit on it.
Kalshi acknowledged 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.” The next sentence adds that “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 respect.”
That language also explains the remedy. Kalshi already had blocks running, keyed to IP address and residency, and investigators got through them anyway. The agreement answers that gap with the multi-source solution GeoComply is to supply.
The board treats sports event contracts as wagering under NRS 463.0193 and 463.01962, which requires a Nevada license, and has found Kalshi’s operations violate NRS 463.160, NRS 463.350, NRS 465.086 and NRS 465.092. Kalshi and other prediction market apps have argued that federal commodities law leaves such contracts to the Commodity Futures Trading Commission.
How The Case Reached Contempt
Nevada, the oldest regulated market for legal sports betting in the country, won the underlying ruling April 3, when the court granted the board’s injunction motion from the bench and extended an existing restraining order 14 days. The court entered the written preliminary injunction May 18, barring Kalshi from offering or facilitating contracts on sports, election or entertainment events in the state.
Nevada wanted Kalshi in contempt and fined in an application filed June 4, and on June 15 the court set the hearing.
“The Court required Kalshi to stop offering covered event contracts in Nevada, and Kalshi violated that order,” Board Chairman Mike Dreitzer said in the announcement. He added that the board “has successfully restricted the operation of all unlicensed prediction markets known to be operating in Nevada.”
Nevada Gets Whatever Michigan Gets
One term reaches outside the case. Kalshi agreed to give Nevada “the same information and updates regarding its implementation of the GeoComply geofencing solution as it provides to the State of Michigan,” and to let Nevada discuss the solution directly with GeoComply alongside Kalshi’s counsel.
A companion paragraph then walls the deal off, stating the stipulation “is entirely separate from and will not be impacted by proceedings or findings in any other State, including but not limited to the State of Michigan.” Nevada takes the benefit of the Michigan rollout’s reporting without taking on the risk of a Michigan outcome.
Reporting Runs Until The Injunction Lifts
Kalshi owes the board periodic progress updates in the meantime. The stipulation remains in place for as long as the amended preliminary injunction order stands, subject to either side asking the court to modify that order. That leaves the Aug. 12 implementation date as the next test of the arrangement.
