Oh, give me land, lots of land under starry skies above: Nevada’s contempt application against Kalshi has put a narrow technical question at the center of the prediction market wars: can an operator build compliant geofencing in-house, on a $190,000 budget, or is that a category error?

• The argument was kicked off by Nevada, which this week asked for Kalshi to be held in contempt of court.
• The state claims the operator is violating a court order because its in-house geofencing tool does not work properly.
• Nevada is also asking the court to order Kalshi to pay monetary penalties for every day that its geofencing is deemed inadequate.

Let me ride through the wide open country that I love: For John Pappas, industry adviser and regulatory expert, the dispute turns less on cost or technical possibility than on posture.

• The question a court should put to an operator facing a contempt claim, he argued, is whether it deployed a recognized, industry-standard compliant system or built something internally and then asserted the result was compliant.
• “Those are very different postures,” he said, adding that compliant geolocation is a solved problem for operators that choose to prioritize it.

Just turn me loose, let me straddle my old saddle: The state’s filing puts IP-only blocking at a success rate of between 55% and 80%. IP alone, Pappas responded, has never been a sufficient compliance tool: the standard is not where a user claims to be but where they actually are.

• Well-designed multi-signal systems reach very high accuracy, including close to a state border.
• Manu Gambhir, chief executive of Xpoint, said an IP address identifies a network endpoint, not a person, citing carrier routing and carrier-grade NAT (network address translation), where many users share one public address.
• A state line is exactly where IP’s margin of error can straddle the boundary.
• Will Whitehead, commercial director at GeoLocs, called IP-only geofencing fit for a first pass, not a compliance-grade control.
• Layered systems, including GPS, WiFi positioning and cellular, perform much better, with Xpoint citing roughly 99% and GeoLocs high-90%-plus success at borders.

On my cayuse, let me wander over yonder: Kalshi told the court that compliant geofencing could run into the tens of millions, then built its own for $190,000, a contradiction Nevada has seized on.

• Pappas said the question is not what it costs to build a geolocation tool, but what it costs to build one that consistently satisfies the regulatory requirements.
• Operators from single-state businesses to the largest in the sector deploy compliant systems without treating cost as a barrier.
• The problem is not unique to gaming: crypto platforms, financial services firms and streaming providers all manage jurisdiction-based access as routine.

I want to ride to the ridge where the West commences: For Gambhir, a tens-of-millions quote is plausible for an operator of Kalshi’s size, but it represents a ceiling not the going rate. No serious operator runs full precision on every user on every action.

• A cheap IP read establishes whether someone is even plausibly near a prohibited jurisdiction, reserving the costly multi-signal checks for users near a border.
• “The headline figures usually assume a brute-force model, full precision on everyone, all the time, that nobody serious actually runs,” he said.
• Whitehead put a mature solution’s cost down to accumulated expertise and ongoing support, not prohibitive technology. Both judged the real figure to sit well below Kalshi’s estimate.

And gaze at the moon till I lose my senses: Nevada’s claim that its investigators bought contracts from inside the state, without a VPN, drew the most damaging contrast with Kalshi’s reported reliance on “family and friends” testing. Pappas is unconvinced by the in-house route.

• Regulated gaming, he said, subjects geolocation to extensive independent testing before launch, including specialized laboratories, scripts probing real-world and adversarial scenarios, and with periodic retesting required as masking techniques evolve.
• Compliance is an ongoing process, not a one-time certification, and a world away from informal testing by untrained users.

Listen to the murmur of the cottonwood trees: Whitehead described exactly that kind of cycle: controlled in-state and out-of-state testing on real devices, boundary validation, systematic VPN and spoofing-resistance testing, audit logging and independent certification.

• Gambhir cited the GLI-19 and GLI-33 standards as the benchmark for what “tested” means, though they do not formally apply to prediction markets.
• He noted a credential that may weigh more with a regulator than any accuracy figure: serious providers are themselves licensed as gaming vendors state by state, and so already vetted.

No, papa, don’t you fence me in: On the limits, there is no disagreement: a 100% block is not technically possible, and the honest standard is a commercially reasonable, continuously tested best effort.

• Gambhir noted that Kalshi’s dual DCM and FCM structure creates geolocation challenges a straight sportsbook does not face.
• They are solvable, but something to design for rather than bolt on.
• For the court in Nevada, the question is narrower: not whether a perfect block exists, but whether Kalshi built in good faith toward a recognized standard, or merely claimed it had.
• Note: Kalshi was contacted for the article but did not respond to questions.

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