Key Points
- On March 20, a Nevada court imposed a 14-day restraining order preventing Kalshi from providing sports, entertainment, and election contracts to state residents
- Users in Nevada circumvented these restrictions by merely updating their account addresses to locations in other states without facing verification checks
- The platform relies on registration data rather than geolocation tracking, a method critics argue doesn’t satisfy the court’s mandate
- On March 17, Arizona prosecutors filed 20 criminal misdemeanor charges against Kalshi, marking the first state criminal action against the company
- A critical hearing scheduled for April 3 will determine if Nevada pursues a permanent injunction that could influence regulatory actions nationwide
The prediction market operator Kalshi is under scrutiny for potentially failing to adequately enforce a Nevada court directive designed to prevent state residents from accessing sports and entertainment betting markets.
On March 20, a Nevada state court implemented a temporary restraining order mandating that Kalshi cease providing sports, entertainment, and election-related contracts to anyone located within Nevada’s borders for a two-week period.
The platform appeared to implement compliance measures almost immediately. However, evidence quickly emerged suggesting that Nevada-based users maintained access to prohibited markets.
The Workaround Nevada Users Discovered
Reports from Gambling Insider indicate that Nevada residents successfully wagered on sports through Kalshi’s platform as late as March 26. One individual described to the publication how they circumvented the restriction simply by modifying their account address to reflect a location outside Nevada.
Following this address modification, no further verification steps were required. The individual proceeded to place a wager on a Major League Baseball matchup.
Attorney Daniel Wallach, who specializes in gaming law, stated on X that Kalshi could face a contempt motion if the company is indeed violating the court’s directive.
The restraining order explicitly references activity occurring “in Nevada,” indicating it should apply based on a user’s actual physical location rather than the address listed in their account profile.
Kalshi has maintained that geofencing technology—the same location-verification system sportsbooks employ—is prohibitively expensive and impractical for their operations. The company instead appears to depend on the addresses users provide during account registration.
This methodology has created an obvious vulnerability. Roger Gros, a Nevada resident who edits Global Gaming Business, reported being unable to trade while traveling in Arizona because his registered address remained in Nevada. Conversely, someone physically present in Nevada with an address listed elsewhere faced no trading restrictions.
Most legal interpretations of the court order suggest Kalshi should be blocking anyone physically present within Nevada, irrespective of their account’s registered address.
Gambling Insider reported that Kalshi declined to provide comment when contacted.
Criminal Charges in Arizona and Expanding State Opposition
Additional concerns exist regarding which specific markets Kalshi actually restricted. Las Vegas-based investigative journalist Brian Joseph discovered that while sports contracts appeared fully blocked, certain markets connected to elections and entertainment remained accessible, relabeled under alternative categories such as “mentions” or “politics.”
Nevada isn’t alone in pursuing regulatory action. Arizona Attorney General Kris Mayes filed 20 misdemeanor criminal charges against Kalshi on March 17, representing the first criminal prosecution any state has initiated against the platform.
The charges allege Kalshi operated an unlawful gambling enterprise by accepting wagers on collegiate sports, individual player performance, and political elections. Kalshi has dismissed these charges as without merit.
Nevada’s legal action carries particular significance given the state’s status as America’s gambling epicenter. Some industry analysts have identified prediction markets as a contributing factor in declining sportsbook revenues. This year’s Super Bowl handle in Nevada reached just $133.8 million, representing the lowest figure in more than ten years.
Concurrently, federal legislators have proposed bills that would completely prohibit sports-event contracts on prediction market platforms.
The temporary restraining order concludes on April 3, when a hearing will address Nevada’s petition for a permanent injunction.
Should the court grant this request, Nevada would establish itself as the first state to permanently prohibit Kalshi’s sports, entertainment, and election contracts. Regulatory authorities across other states are anticipated to closely monitor this decision.
During the April 3 hearing, Nevada may also contend that Kalshi’s reliance on registration data instead of geolocation technology fails to satisfy the court order’s explicit requirement to block access for individuals physically located “in Nevada.”
