LAS VEGAS (KTNV) — Nevada gaming regulators and Kalshi, an online betting platform and prediction market, are continuing to butt heads.
As I previously reported, in February, the Ninth Circuit Court of Appeals ruled in favor of the Nevada Gaming Control Board that prediction market Kalshi can be banned from offering sports contracts in Nevada.
In June, gaming regulators asked the court to punish Kalshi, claiming the company was violating court orders that ban event contracts in Nevada.
However, in July, both sides reached an agreement where Kalshi agreed to put geofencing in place by Aug. 12, 2026 to prevent anyone in the State of Nevada from placing trades in violation of the preliminary injunction. If they didn't put that in place in time, Kalshi would either pay $120,000 per day to the state until they comply or submit a sworn affidavit to the court explaining why geofencing is incomplete.
Nevada gaming regulators have filed new court documents claiming that Kalshi still isn't complying with court order.
"Enough is enough. Kalshi may be working towards compliance in good faith, but the Court's order required more than effort," state prosecutors write in their latest filing. "Kalshi knew exactly what the consequences would be if it failed to be in complete compliance by August 12, 2026. But it was not in compliance — and rather than go to the Court with an explanation, Kalshi (again) required the Board to file this motion and continue to expend the State's resources to get it to fully comply with the Court's Orders."
You can read the full filing below.
Attorneys representing Kalshi denied those allegations and said Kalshi retained a provider to implement geofencing software, gave Nevada regulators updates about how that process was going, and that state investigators misrepresented their residence to Kalshi on purpose to try to place trades on August 12.
They claim that violates federal law and that the State of Nevada "has a single-minded focus on attacking Kalshi."
You can read the full letter from Kalshi's attorneys below.
Kalshi's General Counsel, Rick Heaslip, also sent me the following statement.
"Kalshi went above and beyond to geofence Nevada as requested. We hired a state-approved vendor and updated Nevada every step of the way, with no response. Instead of engaging, they falsified information (breaking federal law) to hunt for a loophole and manufacture another legal grievance. Even then, we addressed it within hours, but they ran to court anyways.This is not the behavior of a regulator trying to protect consumers - it is a vindictive waste of taxpayer dollars at the bidding of casinos.”
While Kalshi states gaming regulators are doing the bidding of casinos, the Nevada Gaming Control Board has repeatedly stated they are trying to protect tax dollars. Since Kalshi is unlicensed, regulators say they pay no gaming taxes.
The matter was brought up during a Gaming Control Board meeting earlier this month, when the Hon. George Assad asked Joe Asher, the President and CEO of Boomer Sportsbook what he thought about Kalshi.
"What's your opinion on filing a motion to have them disgorge the ill-gotten gains that they've received from the State of Nevada, that they're basically depriving the students and the kids of Nevada of better public education, better roads, better housing, Medicaid, all the state funding that the tax dollars are being lost to the State of Nevada through Kalshi and other prediction markets not paying their taxes here," Assad asked.
"Well, I mean, that is one reason why states legalize gambling. Right? There's the regulatory aspect and then there's the fundraising aspect and revenue from gambling, some states, of course, it's specifically directed or goes to this or that. Other states, it goes into the general fund," Asher said. "When you have illegal bookmaking where people are not subject to regulation and they're not paying their taxes, then, of course, there's a loss in revenue to the states. Whether it's in Nevada or in New York, where the legal sportsbooks are paying a 51% tax rate versus Kalshi, which is paying zero, it's just not sustainable."
When looking at Nevada gaming taxes, between $1.1 billion and $1.25 billion is brought in every year.