Kalshi Settles Nevada Contempt Case — Agrees to GeoComply Geofencing as Hearing Is Canceled
Kalshi has reached a settlement with the Nevada Gaming Control Board, canceling contempt proceedings triggered by evidence that NGCB investigators successfully purchased prohibited contracts eight times while physically inside Nevada. Under the deal, Kalshi must deploy a GeoComply-based geofencing system by August 12 or face $120,000-per-day fines. The settlement also defines the geofencing standard: a commercial multi-source system from a recognized vendor, not an in-house IP-blocking tool.
The Nevada Gaming Control Board and Kalshi have agreed to a settlement ending the state's contempt proceedings — proceedings triggered by evidence that NGCB investigators successfully purchased prohibited event contracts on Kalshi's platform eight times in four days while physically located inside Nevada, defeating Kalshi's in-house geofencing tool. Under the deal, Kalshi must implement GeoComply's multi-source geofencing system and have it operational by August 12. Failure to meet that deadline triggers $120,000 in daily fines. NGCB Chair Mike Dreitzer confirmed Kalshi had already begun implementation when the agreement was announced on July 24.
For UK readers, the GeoComply detail is technically significant. GeoComply is the dominant geolocation provider for licensed US gambling operators: it is used by DraftKings, FanDuel, BetMGM, Caesars, and virtually every state-licensed sportsbook in the United States to ensure that wagers are placed within state boundaries as required by US federal and state law. GeoComply's technology uses a combination of GPS, Wi-Fi triangulation, IP data, and mobile device signals — a multi-source approach that is significantly harder to defeat than a single-source IP-based system. The UK Gambling Commission requires licensed operators to implement geolocation checks that meet similar multi-source standards for age verification and location confirmation. Kalshi's original May compliance attempt used a $190,000 in-house IP tool that GeoComply's own senior vice president testified could be built to proper standard in one to two weeks — making Kalshi's argument that compliant geofencing was technically prohibitive difficult to sustain in court.
The settlement sets a de facto compliance standard for prediction markets facing state geofencing orders. The question of what counts as adequate geolocation blocking — which US courts had not previously defined specifically for prediction market operators — now has an answer in the Nevada record: a commercial multi-source system from a recognized geolocation vendor. Michigan's August 12 geofencing deadline for Kalshi also involves GeoComply, meaning both states have convergently required the same vendor and the same technical approach. This has implications for other platforms: Polymarket, Robinhood's Rothera, and other CFTC-registered exchanges operating under state restrictions in the same jurisdictions will face the same defined standard if their own geofencing is tested.
The Nevada settlement resolves the most acute immediate confrontation in Kalshi's regulatory calendar. The underlying Nevada litigation — the May 18 preliminary injunction — remains in force and the NGCB's enforcement case continues. What the settlement ends is the contempt track: instead of a judicial finding of contempt, Kalshi has a defined compliance path and a vendor engaged. The August 12 deadline arriving simultaneously in both Nevada and Michigan means that by the time the NFL regular season begins in September, Kalshi's geofencing either works to the GeoComply standard or daily fines are accruing in two states simultaneously. The NFL season is the highest-volume period for sports event contracts across all platforms, which is also why the compliance question is highest-stakes precisely now.
Operators mentioned in this article
Recent updates
Kalshi Launches Gold and Silver Perpetual Futures After CFTC Approval — First Non-Crypto Perps Cleared in the US
The CFTC approved and Kalshi launched perpetual futures on gold and silver on September 10 — the first non-cryptocurrency perps to receive US regulatory clearance. Contracts are cash-settled, perpetual, and 24/7. Kalshi has pending applications for US equities, copper, and currencies. Crypto perps have done $44 billion in notional volume since May. The launches put Kalshi in direct competition with CME and COMEX as US commodity trading venues.
Robinhood Agrees to Exit Michigan Sports Contracts by October 9 — Court-Approved Deal Described as Blueprint
Robinhood Derivatives agreed on September 4, under a court-approved stipulation, to stop new Michigan sports event contracts by September 9 and close positions by October 9. Michigan will not enforce gambling laws against Robinhood while it complies. The deal preserves Robinhood's CEA preemption argument and keeps Sixth Circuit appeals on track. Legal Sports Report called it a potential blueprint for similar interim accommodations between platforms and states.
Kalshi Seeks Ninth Circuit En Banc Rehearing While Robinhood Files Separate SCOTUS Petition
Kalshi petitioned the full Ninth Circuit (11 judges) for en banc rehearing of the August 28 3-0 ruling for Nevada on September 9. On the same day, Robinhood filed a separate SCOTUS certiorari petition from the same ruling, going directly to the Supreme Court. New Jersey already has a SCOTUS petition filed from the Third Circuit's April ruling. Two cert petitions now sit before SCOTUS on the prediction market question.