TLDR
- Nevada’s Gaming Control Board asked a court to hold Kalshi in contempt for ignoring an order to block state users from trading
- Nevada is seeking penalties of at least $120,000 per day Kalshi remains non-compliant
- Kalshi is using an IP-address-based system to restrict Nevada users, which the state says is unreliable
- California joined a 37-state coalition filing an amicus brief against Kalshi in the Ohio case at the Sixth Circuit
- Both Nevada AG Aaron Ford and California AG Rob Bonta have personal political stakes in the outcome
Nevada and California are stepping up their legal battles against prediction market platform Kalshi, with court filings and coalition efforts putting new pressure on the company.
Nevada Moves Toward Contempt
Nevada’s Gaming Control Board filed a request on Friday asking the state’s First Judicial District Court to hold Kalshi in contempt. The board says Kalshi has failed to comply with a court order requiring it to block Nevada users from trading sports, entertainment, and election contracts on its platform.
The original order was issued on April 3. An amended version followed on May 18. Kalshi has not complied with either, according to the state.
Nevada is asking for penalties of at least $120,000 for each day Kalshi stays out of compliance. That figure comes directly from court filings.
Kalshi responded to the initial order by blocking users based on IP addresses. The state says that approach is not enough. Court filings describe the method as unreliable, noting that IP addresses are “notoriously” inaccurate for pinpointing user location.
The state wants geofencing, a standard practice in the US gambling industry that restricts access at the jurisdiction level rather than by individual user. Kalshi has resisted geofencing, citing the cost and federal rules requiring open access to all US users.
Kalshi’s spokesperson Jacki McGavick said the company has complied with the order. She added that if there was a technical flaw, the Gaming Control Board had not provided the information needed to fix it.
California Joins Coalition Against Kalshi
On the same day Nevada filed its contempt request, California Attorney General Rob Bonta announced the state had joined a 37-state amicus brief against Kalshi in its lawsuit against Ohio. That case is being heard by the US Court of Appeals for the Sixth Circuit.
This was the seventh time California has joined a multistate effort targeting prediction markets. The state also joined a similar brief in Kalshi’s case against Tennessee two weeks earlier, which has since been consolidated with the Ohio case.
Bonta said the filing was about protecting state authority over gambling regulation. He argued that prediction markets should not be able to use federal commodities law to bypass state consumer protection rules.
California has not filed its own direct lawsuit against Kalshi. Three state gaming tribes did sue the company last year under the federal Indian Gaming Regulatory Act, but lost a bid for a preliminary injunction. That appeal is active in the Ninth Circuit.
Political Stakes for Ford and Bonta
Both attorneys general have personal reasons to pursue this fight. Nevada AG Aaron Ford recently won the Democratic primary and is now running for governor against Republican incumbent Joe Lombardo. Ford is aiming to become Nevada’s first Black governor.
California’s Bonta is running for reelection and has taken a series of actions that align with the interests of the state’s powerful gaming tribes, whose California and northern Nevada casinos generated $12.1 billion in gross gaming revenue in fiscal year 2024.
Prediction markets traders on Kalshi give Ford a 59% chance of winning the governor’s race in November. Polymarket puts the Democratic nominee at 52%.
