Nevada and Kalshi have agreed to put an escalating contempt fight on hold after jointly asking the court to cancel a scheduled hearing and instead oversee the rollout of stronger geofencing technology. The agreement shifts the immediate focus from sanctions to technical compliance while the broader legal battle over prediction market contracts continues.
The joint filing, submitted by the State of Nevada through the Nevada Gaming Control Board and Kalshi, asks the court to vacate a July 29, 2026 hearing that had been scheduled to consider the state’s application for an order to show cause regarding contempt. Nevada filed that application after investigators said they could still place trades on sports, election and entertainment event contracts despite an amended preliminary injunction requiring those markets to be blocked within the state.
The stipulation explains that “the Parties agree that entry of this Stipulation supports vacating the Hearing.” It further provides, “The Hearing set for July 29, 2026 is hereby vacated.” Unless either side later seeks court approval to change the arrangement, the agreement will remain effective “for as long as the Amended PI Order is in place.”
The dispute stems from a March 2025 cease-and-desist order issued by Nevada regulators, who argue Kalshi’s event contracts amount to unlicensed gambling under state law. A temporary restraining order followed in March 2026 before the court later entered an amended preliminary injunction. Earlier this year, a federal judge also declined to halt Nevada’s enforcement effort, writing that “Litigating in state court is not a harm, let alone an irreparable harm.”
The new filing acknowledges that, “notwithstanding Kalshi’s implementation of IP-based and residency-based trading blocks, the State’s investigators have successfully placed trades in sports-, election-, and entertainment-related event contracts during the pendency of the Court’s Amended PI Order.”
Kalshi also makes clear it is not accepting liability. The stipulation states, “For the avoidance of doubt, Kalshi does not concede that any such trades amount to cause for an order of contempt, and Kalshi reserves all rights and defenses in this respect.”
Instead of immediately arguing contempt, the parties will concentrate on GeoComply’s geofencing rollout. Kalshi must complete deployment or file “a sworn affidavit of a Kalshi and/or GeoComply representative explaining why implementation of the geofencing solution remains incomplete.” If the court later concludes Kalshi “failed to show that it acted with sufficient diligence in implementing the GeoComply solution,” the company “may be subject to penalties in an amount to be determined by the Court.”
Kalshi will also provide Nevada with the same implementation updates shared with Michigan regulators and permit discussions with GeoComply alongside company counsel. The agreement additionally states that “The Stipulation is entirely separate from and will not be impacted by proceedings or findings in any other State, including but not limited to the State of Michigan.” The joint stipulation was signed on July 23 and now awaits court approval.
Featured image: Kalshi / Canva
