Nevada Gaming Control Board seeks Kalshi contempt ruling
The Nevada Gaming Control Board has asked a court to hold prediction market operator Kalshi in contempt for allegedly not complying with a recent court order.
According to a filing submitted to the First Judicial District Court for the State of Nevada on 12 June, the regulator claims that Kalshi has not complied with an order issued on 18 May 18 to geofence its platform to prevent Nevada residents from accessing sports and other event contracts.
The regulator seeks a finding of contempt and monetary penalties against Kalshi.
“The Court has required Kalshi to stop offering covered event contracts in Nevada. We will continue to vigorously enforce Nevada law to safeguard gaming in our state,” Nevada Gaming Control Board Chairman Mike Dreitzer said in a statement.
This is the latest step in Nevada’s efforts to limit prediction market operators that the state says are offering unlicensed wagering products. The regulator said it has taken action against other prediction market companies and has limited the operations of multiple unlicensed platforms in the state.
Nevada regulators allege that sports-event contracts and some of the other event-based contracts Kalshi offers constitute wagering activity under Nevada state law, so they require licensing. The case is the latest in a series of regulatory disputes between state regulators and prediction markets.
Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.
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The Backstory
Nevada’s challenge moves from warning to enforcement
Nevada’s request that a court hold Kalshi in contempt marks a sharper phase in a dispute that has been building for months: whether sports event contracts offered through federally regulated prediction markets can be treated as financial instruments or must comply with state gambling law. The Nevada Gaming Control Board’s latest filing, submitted June 12 in the First Judicial District Court, alleges Kalshi failed to comply with a May 18 order requiring the company to geofence its platform and block Nevada residents from accessing sports and other covered event contracts.
The contempt request raises the stakes beyond a declaratory fight over jurisdiction. Nevada is now asking the court to impose monetary penalties and find that Kalshi has disregarded a direct order. The regulator’s position is that sports-event contracts and some other event-based markets operate as wagering under Nevada law and therefore cannot be offered without state approval. Kalshi’s core defense, echoed in other states, is that its contracts are listed on a federally regulated derivatives exchange and fall under the Commodity Futures Trading Commission’s oversight.
The immediate significance is practical as much as legal. Nevada’s gaming market is built around licensing, taxation, surveillance, consumer protections and enforcement powers. If a prediction exchange can offer sports-linked products into the state without a Nevada gaming license, regulators argue, it creates an alternative betting channel outside the system that licensed operators are required to navigate.
A cease-and-desist letter set the conflict in motion
The current contempt push traces back to Nevada’s March enforcement posture, when the board sent Kalshi a cease-and-desist letter asserting that the company’s event-based contracts on sports and election outcomes were unlawful in the state unless approved by the regulator. As reported in Nevada’s cease-and-desist action against Kalshi, the board gave the New York-based exchange until March 14, 2025, to stop what it called unlawful operations.
That letter framed the dispute in terms of Nevada’s sovereignty over gambling activity within its borders. Then-Chairman Kirk Hendrick said all sports pools in Nevada must undergo extensive investigations before licensing, comply with strict regulation and pay applicable taxes and fees. The letter also underscored that Nevada bars licensed sports pools from accepting wagers on election outcomes, a point aimed at distinguishing Kalshi’s broader event-contract model from the legal sportsbook market.
The timing mattered. Kalshi had recently drawn national attention when its partnership with Robinhood to offer sports contracts during Super Bowl LIX weekend was halted after the CFTC intervened. That episode showed how fast prediction markets were trying to move into mainstream consumer distribution and how quickly regulators at both federal and state levels were being forced to respond.
Court filings widened Nevada’s case
After the cease-and-desist letter, Nevada escalated with a civil enforcement action in Carson City District Court. In the board’s civil complaint against Kalshi, regulators sought a declaration that the company’s activities violated state gaming law and an injunction barring service to Nevada residents.
That complaint also addressed Kalshi’s public positioning. Nevada took issue with the company’s promotion of sports contracts as “100% legal in all 50 states,” arguing that such claims undercut licensed operators and threatened the state’s regulated gaming economy. The board alleged that Kalshi continued to expand while litigation was pending, intensifying the state’s concern that delay could allow unlicensed activity to become entrenched.
The procedural path has been uneven. Nevada had sent the March notice, but Kalshi was allowed to continue operating for a period after an April injunction. Later, a judge ruled against Kalshi and found it subject to Nevada gambling laws. The board’s current contempt motion rests on the contention that once the May 18 order required geofencing, continued access by Nevada residents became a compliance failure rather than merely a disputed legal theory.
The board has pointed to court materials in support of its enforcement stance, including its contempt filing against Kalshi and a related status report on enforcement action. Those filings reflect Nevada’s attempt to move the case from argument over classification to proof of whether Kalshi obeyed a binding state court order.
Prediction markets face a widening state backlash
Nevada’s case is part of a broader national contest between state gambling regulators and prediction market operators. The same question has surfaced across multiple jurisdictions: when a user buys a yes-or-no contract tied to a sports outcome, is that a commodity contract or a bet?
Massachusetts recently produced one of the most consequential state-court setbacks for Kalshi. In a ruling requiring Kalshi to halt sports betting products in Massachusetts, a judge found the company could not offer sports betting products to residents without a gaming license. The case, brought by Attorney General Andrea Joy Campbell, treated Kalshi’s sports event contracts as unlicensed sports wagering. According to Reuters, the ban could take effect as early as Jan. 23 and would be the first such ban in the country.
Tennessee has moved in the opposite procedural posture but with the same substantive claim. After a federal court temporarily blocked the state from enforcing its sports betting laws against Kalshi, Attorney General Jonathan Skrmetti appealed. As detailed in Tennessee’s appeal over Kalshi’s sports-event contracts, the state argues that the products function like sportsbook wagers and should be subject to licensing rules, age restrictions and consumer protections. Kalshi maintains federal derivatives law preempts state enforcement.
Those cases show why Nevada’s contempt bid is being watched closely. A ruling on contempt would not resolve every preemption question, but it could demonstrate that state courts are willing to enforce geofencing and licensing orders while the broader legal debate continues.
Why Nevada is drawing a hard line
Nevada’s approach is shaped by its role as the most mature gambling regulatory jurisdiction in the U.S. The state does not merely permit wagering; it conditions access on detailed suitability reviews, ongoing compliance and tax obligations. That structure is a core economic asset for Las Vegas casinos, sportsbook operators, suppliers and technology providers.
The contrast with licensed market participants is central to the board’s argument. Companies seeking Nevada approval often spend months or years in review. Kambi Group’s recent approval illustrates the standard path. The sportsbook technology provider secured a Manufacturer and Distributor License and an Informative Services License after review by Nevada regulators, allowing it to serve non-restricted gaming establishments in the state. In Kambi’s Nevada licensing approval, the company described Nevada as the “gold standard” for betting and gaming regulation.
That licensing framework explains why regulators view prediction markets as more than a novel financial product. If sports contracts are offered directly to consumers without Nevada review, the state sees a competitive imbalance: licensed sportsbooks and suppliers bear compliance costs while federally registered exchanges claim access through a different legal channel. Regulators also cite consumer risks, including whether market users receive the same responsible gambling protections and dispute processes that apply in licensed sports betting.
The next fight is compliance as much as classification
Kalshi’s legal strategy depends on preserving the distinction between event contracts and gambling. State regulators are trying to collapse that distinction for sports-related markets, arguing that users are economically staking money on outcomes in the same way they would through a sportsbook. The CFTC’s role complicates the dispute because Kalshi operates under federal market infrastructure, creating a potential conflict between commodities regulation and state police powers over gambling.
Nevada’s contempt request narrows the immediate question. The court does not need to settle the entire national debate to decide whether Kalshi complied with the May 18 order. If the board proves Nevada residents could still access prohibited contracts after the order, penalties could follow and other states may see a model for enforcing local restrictions even while appeals proceed.
For the prediction market industry, the risk is fragmentation. A platform designed around national access could face state-by-state geofencing, litigation costs and product limits. For state gaming regulators, the risk is the opposite: if federal classification shields sports event contracts from local gambling laws, a major category of sports wagering could migrate outside traditional licensing regimes. Nevada’s latest filing therefore represents more than a dispute with one company. It is a test of whether the state’s gambling laws can keep pace with markets that present themselves as finance, but look to regulators like betting.
