Kalshi accused Nevada's gaming regulator of violating federal law after the state sought daily penalties of $120,000 over the company's alleged failure to block Nevada users from trading certain contracts. The dispute intensified after investigators placed nine trades on Kalshi from Nevada cellular networks one day after a court-ordered geofencing deadline. Kalshi said it hired GeoComply, a Nevada-approved location-checking vendor, kept regulators updated, and fixed the issue within hours, while alleging investigators misrepresented their residences or bypassed the platform's blocking tools. The fight is part of a wider battle over whether prediction markets are federally regulated financial products or state-regulated gambling. Nevada previously won a preliminary injunction barring Kalshi from offering certain contracts in the state without a gaming license. Separately, Baltimore has sued Kalshi and Polymarket over sports-related contracts, New York filed a July 31 case accusing Kalshi of running an unlicensed gambling business, and the New York City Council has opened an inquiry into marketing by Kalshi, Polymarket, Coinbase, and Gemini Titan. On Aug. 11, the Commodity Futures Trading Commission used emergency authority to direct Kalshi to continue operating under the Commodity Exchange Act's core principles, leaving the company caught between federal oversight and mounting state enforcement.