Nevada Gaming Control Board asks state court to hold Kalshi in contempt – CDC Gaming

Arguing Kalshi is taking hundreds of millions of dollars in wagers on the World Cup and the NBA and Stanley Cup finals, the Nevada Gaming Control Board Friday asked a district court to hold the prediction market operator in contempt, arguing it hasn’t complied with a May 18 judicial order against offering sports betting in the state.

Filed with the First Judicial District Court for the State of Nevada, the filing accuses Kalshi of not geofencing its operations as required, so that “it does not offer or facilitate the offering of any sports-, election-, or entertainment-related event contracts” to anyone located in Nevada.

“Kalshi’s stubborn refusal to comply with the preliminary injunction is causing severe and ongoing harm to Nevada, its finances, and its citizens,” the court filing said. “Every day, Kalshi takes in hundreds of millions in wagers on such events as the NBA Finals, the Stanley Cup Finals and FIFA World Cup. At the same time, Kalshi is severely harming the gaming industry because it refuses to follow the same rules as its licensed sportsbook competitors who actually geofence. This is an intolerable state of affairs. In light of the Board’s investigation and Kalshi’s own admissions that establish its violation of the court order, the court shall hold Kalshi in contempt. Kalshi will never get the message otherwise.”

The Board requested the court to enter a finding of contempt and to impose significant monetary penalties for violation of the court order — either a “disgorgement of all ill-gotten gains” or a sanction of $120,000 a day.

“The court has required Kalshi to stop offering covered event contracts in Nevada,” Board Chair Mike Dreitzer said in a statement. “We will continue to vigorously enforce Nevada law to safeguard gaming in our state.”

In its filing, The Board said that Kalshi by its own admission has spent $190,000 on what regulators referred to as a “homegrown solution that relies only on internet protocol geofencing solutions” that regulators called “notoriously unreliable” for determining user’s locations. The Board accuses Kalshi of being unwilling to use accurate commercial geofencing solutions.

“This is just more from the same old Kalshi playbook; delay, delay, delay,” the court filing said. “Rather than comply with the court’s order Kalshi has taken only a half-hearted and ineffective measure, apparently hoping that the court will deem its meager efforts good enough, so that it can continue profiting at the expense of the state and its citizens.”

The Board said investigators were able to purchase sports betting contracts on Kalshi’s app for NBA playoff games, MLB games, a boxing match, a tennis match, and a celebrity wedding.

The Board has taken action in recent months to halt the operations of other prediction markets in the state and has successfully restricted all unlicensed prediction markets that had been known to be operating in Nevada, Dreitzer said.

The Board considers the offering of sports event contracts, along with certain other event contracts to constitute wagering activity under state law, meaning they must be licensed.

“Nevada’s public policy, as expressed by the Legislature, is that the gaming industry is vitally important to the economy of the state and the general welfare of the inhabitants and therefore must be licensed, controlled, and assisted to protect the public health, safety, morals, good order, and general welfare of the inhabitants of the state,” Dreitzer said.