Questions are emerging over Kalshi’s compliance with a Nevada court’s 14-day temporary restraining order just days after it took effect.
When a Nevada state court issued a temporary restraining order (TRO) against Kalshi on March 20, the prediction market platform was forced to stop offering sports, entertainment, and election-related contracts to users in Nevada for 14 days.
The restriction applies to activity “in Nevada,” rather than a user’s stated residency, creating a key compliance question around how platforms enforce location-based limits.
While it took the company a few hours to comply, everything appeared in order. However, reports began circulating within days that Nevada users could still access the restricted markets by changing the address on their Kalshi account profile to an out-of-state location.
Users in Nevada were still able to bet on sports on the Kalshi app as of yesterday, Thursday, March 26, Gambling Insider has confirmed.
“If Kalshi is violating the TRO, a contempt motion may be on the cards,” gaming lawyer Daniel Wallach said on X.
The TRO applies not only to Nevada residents, but also to all prohibited contracts offered in the state, regardless of where a user’s account says they live.
In other words, the focus is on the user’s physical location, not the address on file, which can be easily changed.
Issues With TRO Compliance
Kalshi has consistently argued that geofencing technology, which sportsbooks use to verify physical location, is too costly and impractical to deploy. Many people watched closely when the TRO was granted to see how Kalshi would police the new restriction.
Early evidence suggests Kalshi restricted access using account registration data, relying on user-provided addresses rather than real-time geolocation.
In a LinkedIn post, Global Gaming Business editor and Nevada resident Roger Gros explained that he couldn’t place trades even though he was in Arizona because his registered account address was in Nevada. Under that logic, out-of-state visitors to Nevada could continue trading as normal.
One Nevada user told Gambling Insider that they were able to bypass the restrictions by changing their account’s listed address to an out-of-state location, with no additional verification required. After regaining access to restricted markets shortly after updating their profile, the user placed a bet on an MLB game on Thursday.
Location vs. Residency: The Legal Question
The TRO itself states that Kalshi is prohibited from offering or facilitating the offering of certain event contracts “in Nevada” and from accepting wagers “from persons… in Nevada.” That frames the restriction around a user’s physical location rather than their stated residency.
That distinction is central to the compliance question. Kalshi’s reliance on account registration data rather than physical location could allow users within Nevada to continue accessing restricted markets. That raises questions about whether its current controls satisfy the order’s geographic scope.
By most interpretations of the TRO, Kalshi should block any user physically located in the state, regardless of the address listed on their account.
Kalshi has not responded to Gambling Insider’s request for comment.
Additional Gaps in Market Restrictions
There are also questions about the scope of Kalshi’s market restrictions.
Investigative journalist Brian Joseph, a Las Vegas resident, tested Kalshi’s restrictions and discovered that the platform completely blocked sports contracts.
However, he found that users could still trade some markets that appeared to fall within or sit adjacent to the banned election and entertainment categories, such as President Trump-related mention markets and markets on the government shutdown, nestled under the “mentions” or “politics” labels rather than “elections”.
A Nationwide Movement
Nevada is not acting alone. On March 17, Arizona Attorney General Kris Mayes filed 20 misdemeanor criminal counts against Kalshi, marking the first time a state has brought criminal charges against the company.
The charges accuse Kalshi of operating an illegal gambling business by accepting bets on college sports, player performance, and elections. Kalshi called the charges meritless and accused Arizona of trying to circumvent federal court proceedings.
Nevada’s case carries particular symbolic weight, since the state is the center of gambling in the U.S. Nevada has both financial and political reasons to push back strongly against prediction markets.
Some industry observers have pointed to alternative platforms, including prediction markets, as a contributing factor to declining handle at sportsbooks. It’s just one data point, but Nevada’s Super Bowl handle came in at $133.8 million, the lowest figure in over a decade.
April 3 Hearing
The 14-day TRO runs through April 3, when there’s a hearing set for Nevada’s request for a permanent injunction. If the court grants that request, Nevada would become the first state to explicitly and indefinitely ban Kalshi’s sports, entertainment, and election contracts.
Regulators in other states will closely watch the outcome. Also watching will be a growing number of U.S. federal lawmakers, who have introduced legislation to outlaw sports-event contracts on prediction markets altogether.
Nevada could also argue that any system relying on registration data rather than physical location fails to prevent access “in Nevada,” as required by the TRO. Whether this ultimately constitutes a violation of the TRO or a gap in implementation may depend on how the court interprets Kalshi’s compliance obligations.
However the court rules, this case is quickly becoming a blueprint for how states approach prediction markets. What happens next in Nevada won’t stay in Nevada, as it will influence the next wave of enforcement across the U.S.
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