Kalshi has accepted a strict Nevada compliance plan after state investigators accessed prohibited event contracts despite an active court order. The prediction market exchange must install stronger location controls by August 12 or pay $120,000 for every day of delay.
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A possible contempt hearing now gives way to a technical deadline carrying a large financial penalty.
Kalshi admitted that Nevada Gaming Control Board investigators could trade prohibited contracts from inside the state. Under an agreement filed with the First Judicial District Court on July 23, the operator must now send regular implementation reports to the regulator while a commercial provider installs new geolocation controls.
The new system must identify people inside Nevada and prevent them from entering sports, political and entertainment prediction markets. Access to those categories remains barred unless Kalshi obtains approval under Nevada gambling law.
Regulators said work had already started when the agreement became public on July 24. Failure to finish by August 12 will trigger a $120,000 penalty for each additional day.
Nevada Gaming Control Board Chairman Mike Dreitzer said Kalshi had violated the court order and would face strong penalties without full compliance. He also said the regulator had restricted every known unlicensed prediction market operating in Nevada.
The First Judicial District Court granted a preliminary injunction on May 18. It barred Kalshi from offering or facilitating covered event contracts within Nevada. Investigators later completed trades that fell under the ban, leading the NGCB to seek a contempt order.
Nevada first targeted Kalshi after sports event contracts became available through Kalshi and Robinhood. State regulators classify those products as wagering and argue that operators need a Nevada gaming licence.
Kalshi has based its defence on federal oversight. The company operates as a Commodity Futures Trading Commission regulated exchange and has argued that federal commodities law takes priority over state gambling rules.
A federal Nevada ruling in late 2025 rejected that position and allowed state enforcement to continue. The judge found that sports contracts remained subject to Nevada gaming law despite federal regulation of the exchange.
Legal results remain divided across the US. Courts and regulators in Massachusetts, Michigan, Washington and other states have challenged sports prediction contracts, while the CFTC continues to support federal control over registered event exchanges.