The Gaming Control Board said in a late Friday court filing in Carson City that prediction market Kalshi has not complied with a judge's order to stop offering sports, election and entertainment betting in the state by the Aug. 12 deadline and should face fines of $120,000 a day.

In the filing, the control board said Kalshi "has profited enormously from its continued violations of Nevada law" and state investigators were able to purchase multiple event contracts in the banned categories from Nevada through mobile phones, "none of which should have been possible under the court's order."

In July, Kalshi agreed to implement "a robust, multi-source geofencing solution provided by a third-party commercial provider" to prevent anyone within Nevada boundaries from entering its site. 

In its agreement with the state, Kalshi utilized GeoComply, a Nevada-licensed technology company.

However, the control board said that when gaming agents informed the company about the trades, they were told they were running a "previous version" of Kalshi's app that "was not subject to geofencing." 

Kalshi's attorneys wrote in a Friday letter to the board that investigators "were able to place a trade because they had violated federal law by misrepresenting their residence to Kalshi, and, in at least one instance, actively worked to circumvent the Kalshi restrictions that blocked the investigator from trading."

In a statement Saturday, Kalshi General Counsel Rick Heaslip called the control board's lawsuit "a vindictive waste of taxpayer dollars at the bidding of casinos."

Heaslip said the company "went above and beyond to geofence Nevada as requested. We hired a state-approved vendor and updated Nevada every step of the way, with no response." 

"Instead of engaging, they falsified information (breaking federal law) to hunt for a loophole and manufacture another legal grievance. Even then, we addressed it within hours, but they ran to court anyways."

The state, Kalshi and two other prediction markets are awaiting a ruling by the 9th U.S. Circuit Court of Appeals that could uphold the regulatory agency's effort to ban the companies from Nevada.