Kalshi faces regulatory fines and court orders over gambling law compliance

The prediction market platform Kalshi is facing significant regulatory challenges in the United States. In Nevada, the Nevada Gaming Control Board (NGCB) has accused the company of violating a previous agreement to restrict its sports, election, and entertainment prediction contracts through geofencing technology. Investigators allege they were able to place restricted trades while connected to Nevada cellular networks. The NGCB has threatened fines of $120,000 per day for non-compliance, while Kalshi denies any wrongdoing and has accused investigators of using false residence information.

Simultaneously, a Washington state judge ordered Kalshi to cease most of its operations by September 2, ruling that the company likely violated state gambling laws and ignored prior notices. This ruling requires the platform to geofence users in Washington from specific markets, including sports, elections, and entertainment. Given that sports wagers reportedly account for up to 90% of Kalshi’s volume, the legal pressure poses an existential threat to its current business model.