Nevada gaming regulators say they have reached an agreement with a leading prediction market that prevents it from writing contracts involving sports results, elections or entertainment-related propositions.
The Nevada Gaming Control Board late Friday announced that it had reached an agreement with New York-based Kalshi to stop writing those contracts by Aug. 12, or the state can impose a penalty of $120,000 a day until it is in compliance.
In an emailed statement, Kalshi acknowledged the agreement, but said it would continue to battle the state in court.
“Nevada is trying to block its own residents from accessing a federally regulated market,” the emailed statement said. “Kalshi is subject to exclusive federal jurisdiction, not state law, and we’ll continue defending that position in court.”
A Kalshi representative said the company has reached an agreement similar to one already approved in Michigan.
“We have entered into a court-approved agreement with Nevada to implement GPS location consistent with the measures we are being ordered to take in Michigan,” the company representative said.
“This is a pragmatic step that addresses the current state of play, in which states are wrongly asserting jurisdiction over federally regulated prediction markets.”
In court for 17 months
The Control Board and Kalshi have been battling in court since March 2025 when regulators first stated that Kalshi and other predictions like it were operating an online wagering business without being licensed by the state.
On May 18, the First Judicial District Court in the state of Carson City entered a preliminary injunction prohibiting Kalshi from offering or facilitating contracts on sports-, election- or entertainment-related events within Nevada. In spite of the court’s order, board investigators repeatedly were able to enter into contracts that Kalshi is prohibited from offering on its platform in Nevada. The board accordingly moved to hold Kalshi in contempt of court for violating the court’s order.
Rather than being held in contempt, Kalshi agreed to take steps to implement a robust, multisource geofencing solution provided by a third-party commercial provider, which would identify and prevent anyone within the geographic boundaries of the state from entering into the prohibited contracts on Kalshi’s platform. Kalshi already has begun the implementation process and must complete it by Aug. 12, or pay the board a penalty of $120,000 per day until implementation is complete. Kalshi will also provide periodic updates to the board detailing its progress.
The settlement is detailed in an agreement that the board and Kalshi filed with the First Judicial District Court on Thursday. In that agreement, Kalshi admitted that board investigators have been able to enter sports-, election- and entertainment-related event contracts from within the state in violation of the court’s order; detailed its process and timeline for full compliance with Nevada law; and agreed to the $120,000-per-day penalty if it fails to meet that timeline.
“The court required Kalshi to stop offering covered event contracts in Nevada, and Kalshi violated that order,” Nevada Gaming Control Board Chairman Mike Dreitzer said in an emailed statement.
“This agreement will ensure that Kalshi fully complies with Nevada law moving forward or it will face stiff penalties. We will continue to vigorously enforce Nevada law to safeguard gaming in our state,” Dreitzer said. “The board has taken decisive action in recent months to halt the operations of other prediction markets in the state and has successfully restricted the operation of all unlicensed prediction markets known to be operating in Nevada.”
Unfair advantage
The state contends that illegal prediction markets have an unfair advantage over licensed sportsbooks because they operate without having to pay the 6.75 percent tax on gross gaming revenue, which benefits the state’s general fund that pays for road and highway construction and maintenance and other state services.
State regulators also say prediction markets have no safeguards against underage gambling or programs to assist persons with compulsive gambling disorders.
Last week, two Nevada delegates to the U.S. House introduced legislation to ban sports and election contracts on prediction markets.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.
