Key Takeaways
- On March 20, a Nevada court imposed a 14-day temporary restraining order preventing Kalshi from providing sports, entertainment, and election betting contracts to state residents
- Users in Nevada discovered they could circumvent the restrictions by updating their registered account address to another state without additional identity verification
- Rather than using geolocation technology, Kalshi relies on account registration information, which legal experts suggest may not satisfy the court’s enforcement requirements
- On March 17, Arizona prosecutors filed 20 criminal misdemeanor charges against Kalshi—marking the first criminal case against the platform at the state level
- A critical hearing scheduled for April 3 will determine whether Nevada proceeds with a permanent injunction that could influence regulatory actions nationwide
The prediction market operator Kalshi finds itself under scrutiny regarding its compliance with a Nevada court directive designed to prevent state residents from accessing sports and entertainment betting markets.
On March 20, a Nevada state court granted a temporary restraining order compelling Kalshi to halt all sports, entertainment, and election contract offerings to individuals located within Nevada’s borders for a two-week period.
The platform appeared to implement restrictions shortly after receiving the order. However, subsequent reports revealed that state residents maintained access to prohibited markets.
The Method Behind Continued Access
According to reporting by Gambling Insider, individuals in Nevada successfully placed sports wagers through Kalshi’s platform as late as March 26. One bettor explained to the publication that they sidestepped the geographical restriction by modifying their account’s registered address to reflect an out-of-state location.
Following the address modification, no further authentication or verification process occurred. The individual subsequently wagered on a Major League Baseball contest.
Attorney Daniel Wallach, who specializes in gaming law, stated on X that failure to comply with the restraining order could result in a contempt of court filing.
The court’s restraining order explicitly prohibits activity occurring “in Nevada,” establishing that enforcement depends on physical location rather than the address registered to an account.
Kalshi has maintained that implementing geofencing technology—the location verification system standard among licensed sportsbook operators—would be economically burdensome and operationally impractical. The company instead appears to depend on the residential information users provide during account creation.
This method has created an enforcement vulnerability. Roger Gros, a Nevada resident who edits Global Gaming Business, reported being prevented from trading while traveling in Arizona because his account still reflected his Nevada address. Conversely, someone physically present in Nevada with an out-of-state address registered could access markets without restriction.
Under most interpretations of the court’s directive, Kalshi should be blocking access for anyone physically present within Nevada’s boundaries, independent of their registered address information.
Gambling Insider reported that Kalshi declined to provide a statement regarding these compliance concerns.
Criminal Charges in Arizona and Expanding State Opposition
Questions have also emerged regarding which specific markets Kalshi restricted following the order. Brian Joseph, an investigative reporter working in Las Vegas, discovered that sports-related contracts were completely unavailable. However, certain markets connected to elections and entertainment remained accessible under alternative category labels such as “mentions” or “politics.”
Nevada isn’t alone in pursuing legal action. Arizona Attorney General Kris Mayes filed 20 misdemeanor criminal charges against Kalshi on March 17. This represents the first instance of any state bringing criminal prosecution against the prediction market company.
The criminal complaint alleges that Kalshi operated an unlawful gambling enterprise by facilitating wagers on collegiate sporting events, individual player performance, and electoral outcomes. Kalshi has characterized the charges as without merit.
Nevada’s legal action carries particular significance given the state’s position as America’s gambling hub. Some industry analysts have identified prediction markets as a contributing factor to declining traditional sportsbook revenues. Nevada recorded $133.8 million in Super Bowl betting handle this year—the smallest total in more than ten years.
At the federal level, members of Congress have proposed legislation that would prohibit sports-event contracts on prediction market platforms altogether.
The temporary restraining order reaches its expiration date on April 3. A court hearing is set for that date to address Nevada’s petition for a permanent injunction.
Should the court grant permanent relief, Nevada would establish itself as the first state to permanently prohibit Kalshi’s sports, entertainment, and election contract offerings. Regulatory authorities in additional states are anticipated to monitor the proceedings with considerable interest.
During the April 3 hearing, Nevada officials may also contend that Kalshi’s reliance on registration data rather than geolocation technology fails to satisfy the court order’s mandate to block access “in Nevada.”
