Nevada Gaming Control Board Seeks $120,000 Daily Fines from Kalshi After Alleged Geofencing Failure
TL;DR — Nevada seeks $120,000 daily fines after investigators placed nine trades post-Aug. 12 deadline. Kalshi claims the trades resulted from investigators misrepresenting locations and using an older, unfenced app version. The court must resolve whether geofencing met the order or was deliberately bypassed. (52 words)
SCCG Take — The exchange exposes practical limits of app-based geofencing when updates are not mandatory. Regulators gain leverage to enforce strict compliance, while operators must tighten version control to limit workaround exposure across states. (36 words)
The Nevada Gaming Control Board told a Carson City court on Aug. 14 that Kalshi failed to meet a judge’s order to stop offering event contracts on sports, entertainment, and elections by the Aug. 12 deadline. The board asked the First Judicial District Court to impose daily penalties of $120,000 plus legal fees. It argued the company “has profited enormously from its continued violation of Nevada law.”
Board investigators placed nine separate trades on Kalshi’s mobile app from inside Nevada the day after the deadline. Kalshi responded that the trades occurred only because investigators misrepresented their residence and “actively worked to circumvent” the restrictions, violating federal law in the process.
Rick Heaslip, Kalshi’s General Counsel and Chief Regulatory Officer, stated the company “went above and beyond to geofence Nevada as requested.” Heaslip noted that Kalshi hired the state-approved vendor GeoComply, provided regular updates on implementation, and received no questions from the board before the post-deadline attempts. The company said investigators used a prior version of the app that was not subject to geofencing.
Kalshi Points to Investigator Tactics and Similar Michigan Findings
Kalshi’s letter to the NGCB accused the investigators of breaking federal law through misrepresentation and deliberate circumvention. The board called those claims “baseless” and said Kalshi “cannot obscure the fact it missed an agreed-upon deadline to comply with Nevada law.” The court must now decide whether the geofencing was adequate or whether the investigators bypassed otherwise functional controls.
Testing reported by InGame in Michigan produced a parallel result. An account registered in Indiana allowed sports trades from inside Michigan until the app was manually updated to the latest version. No prompt required the update. That pattern matches Kalshi’s explanation for the Nevada trades.
Timeline of the Dispute
The conflict began in March 2025 with a cease-and-desist letter claiming unlicensed sports betting. Kalshi sued and obtained a preliminary injunction from U.S. District Judge Andrew Gordon in April 2025. Gordon dissolved the injunction in November. After appeals to the Ninth Circuit and a state-court enforcement action filed in February 2026, the court issued a preliminary injunction in April. The Nevada Supreme Court denied an emergency stay in early July. Kalshi then agreed to deploy the GeoComply solution by Aug. 12 to avoid a contempt hearing, according to reporting by Gambling Insider.
The immediate question is narrow: did Kalshi meet the specific terms of the order, or did the workaround expose a compliance gap that regulators can punish at $120,000 per day?
Reporting: Gambling Insider
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
Geofencing compliance is worthless if updates are optional — regulators just weaponized app versioning against operators.
We've advised on geofencing in 35+ jurisdictions, and this case proves what we've warned clients for years: voluntary app updates create regulatory exposure you can't fix with vendor checkboxes. Nevada just turned version control into a penalty lever — every operator with optional updates now has a compliance gap regulators can exploit.
- Nevada investigators placed nine trades after Aug. 12 deadline using older app version
- Kalshi claims GeoComply fencing worked; state says meeting deadline was the operator's duty
- Michigan testing confirmed same loophole — no forced update, open trading despite geofence
SCCG angle: SCCG works with GeoComply and compliance architects across 30+ states. When a client faces geofence mandates, we help structure mandatory update flows and audit trails that survive regulator testing — before enforcement starts. We've seen Nevada's playbook; we build around it.
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