Key Points
- On March 20, a Nevada court imposed a 14-day temporary restraining order preventing Kalshi from providing sports, entertainment, and election-based contracts to state residents
- Users in Nevada have reportedly circumvented these limitations by updating their registered addresses to different states without undergoing verification processes
- Rather than employing geolocation tracking systems, Kalshi depends on user-submitted registration information, a method critics argue doesn’t satisfy court order stipulations
- On March 17, Arizona prosecutors filed 20 criminal misdemeanor charges against Kalshi, marking the first criminal case against the platform by any state
- A scheduled April 3 court session will determine if Nevada implements a lasting injunction, potentially influencing regulatory actions in additional jurisdictions
The prediction market operator Kalshi is under scrutiny regarding its compliance with a Nevada judicial directive designed to prevent state residents from accessing sports and entertainment betting options.
On March 20, Nevada’s state court handed down a temporary restraining order demanding that Kalshi cease providing sports, entertainment, and election-focused contracts to individuals located within Nevada’s borders for a two-week period.
The platform seemed to act swiftly in response. However, accounts emerged shortly afterward indicating that Nevada-based users maintained access to prohibited markets.
Methods Users Employed to Bypass Limitations
Gambling Insider reported that individuals in Nevada continued placing sports wagers via Kalshi’s application through at least March 26. A user interviewed by the publication explained they defeated the restriction simply by modifying their account’s registered address to reflect an out-of-state location.
Following the address modification, no supplementary identity confirmation was requested. Subsequently, the individual successfully wagered on a Major League Baseball contest.
Attorney Daniel Wallach, who specializes in gaming law, indicated on X that Kalshi’s potential violation of the restraining order could trigger contempt proceedings.
The restraining order explicitly addresses conduct occurring “in Nevada,” establishing that enforcement hinges on a user’s actual physical whereabouts rather than their account’s stated address.
Kalshi has indicated that implementing geofencing systems—the location-verification technology standard among licensed sportsbooks—presents prohibitive costs and operational challenges. The company instead appears to depend exclusively on addresses provided during account creation.
This strategy generated enforcement gaps. Roger Gros, a Nevada resident serving as editor for Global Gaming Business, reported being prevented from trading while traveling through Arizona because his account maintained a Nevada address. Conversely, an individual physically present in Nevada but listing an address elsewhere faced no trading obstacles.
By conventional interpretation of the judicial directive, Kalshi should restrict access for anyone physically situated within Nevada’s boundaries, irrespective of their registered location.
Gambling Insider’s request for commentary from Kalshi received no response.
Arizona Prosecution and Expanding State Opposition
Additional concerns exist regarding which specific markets Kalshi actually restricted. Las Vegas-based investigative journalist Brian Joseph discovered that sports-related contracts were comprehensively blocked. Nevertheless, certain markets connected to elections and entertainment remained accessible, rebranded under alternative classifications such as “mentions” or “politics.”
Nevada isn’t acting in isolation. Arizona Attorney General Kris Mayes filed 20 misdemeanor criminal charges against Kalshi on March 17, representing the initial criminal prosecution any state has launched against the company.
The allegations assert that Kalshi operated an unlawful gambling enterprise by facilitating wagers on collegiate athletics, individual player statistics, and electoral outcomes. Kalshi characterized the charges as groundless.
Nevada’s legal action carries particular significance given the state’s status as America’s gambling hub. Some industry analysts have identified prediction markets as contributing factors in diminishing sportsbook revenues. Nevada recorded $133.8 million in Super Bowl wagering this year—the weakest performance in more than ten years.
Federal legislators have additionally proposed bills that would completely prohibit sports-event contracts on prediction market platforms.
The 14-day restraining order reaches its expiration on April 3. Court proceedings are scheduled for that date regarding Nevada’s petition for a permanent injunction.
Should the court grant this request, Nevada would establish itself as the inaugural state to permanently prohibit Kalshi’s sports, entertainment, and election-based contracts. Regulatory authorities across other states are anticipated to closely monitor this decision’s outcome.
During the April 3 hearing, Nevada may additionally contend that Kalshi’s reliance on registration information rather than geolocation technology fails to fulfill the court order’s mandate to block access “in Nevada.”
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