Nevada and California initiated separate legal measures against prediction market platform Kalshi late last week. The actions follow a state court order requiring the company to restrict trading access for users within Nevada.
The Nevada Gaming Control Board requested the First Judicial District Court to hold Kalshi in contempt on Friday. The board cites noncompliance with a preliminary order issued on 3 April and an amended ruling from 18 May. Court filings state the state seeks penalties of at least $120,000 for each day of continued noncompliance.
Kalshi currently blocks users based on IP addresses, a method the board describes as unreliable. The company reported an implementation cost of $190,000 for this system. Industry standards typically require geofencing to restrict entire jurisdictions, but prediction market operators have resisted the technology due to expenses and federal regulations mandating open access.
California Joins Multistate Coalition
On the same day, the office of California Attorney General Rob Bonta announced participation in a 37-attorney general coalition. The group filed an amicus brief in the Sixth Circuit Court of Appeals regarding Kalshi’s lawsuit against Ohio. This marks the seventh multistate filing involving California against prediction markets. The state previously joined a similar brief in a consolidated Tennessee case two weeks prior. The public disclosure of the filing indicates increased regulatory activity. NGCB Chairman Mike Dreitzer stated, "We will continue to vigorously enforce Nevada law to safeguard gaming in our state."The Nevada state court remains the only jurisdiction in the United States to issue an order blocking Kalshi from trading. Source: Nevada Gaming Control Board filings and California Attorney General office announcements.