Kalshi Blocked From Washington Bets After CFTC Support

Washington Judge Orders Kalshi to Cease Most Operations

A King County Superior Court judge has issued a final order compelling Kalshi, an event contract exchange, to shut down the majority of its business operations in Washington state. The ruling, announced Thursday by the state Attorney General’s office, found that Kalshi likely violated the state’s Gambling Act and Consumer Protection Act by operating an illegal gambling enterprise.

Restrictions on Kalshi’s Offerings

The court order prohibits Kalshi from offering, accepting, or facilitating wagers on a wide range of categories, including sports, elections, politics, entertainment, culture, technology, and science. It also bars bets on “mentions,” where users wager on whether a public figure will utter specific words. Kalshi is required to implement an IP address and residency-based geofence by August 19 and a multi-source geofencing system by September 2. The Attorney General’s office noted that these restricted categories constitute a significant portion of Kalshi’s business, which is “increasingly driven” by sports betting.

Attorney General Criticizes Kalshi’s Business Model

Attorney General Nick Brown stated that Kalshi had “gotten rich promoting wagers on sports, elections, natural disasters” and events linked to the Iran war. He vowed that his office would continue to hold the exchange accountable.

Marketing Deemed Unfair and Deceptive

The court also barred Kalshi from advertising the covered contracts within Washington, ruling that its marketing of what it deemed illegal gambling constituted “unfair and/or deceptive acts or practices.” The state’s complaint highlighted a Kalshi promotional tweet where a user texted a friend about “found a way to bet on the NFL even though we live in Washington.” The Attorney General’s office argued this demonstrated the company’s awareness that it was circumventing state law.

Federal Regulator’s Differing Stance

This ruling comes just two days after the Commodity Futures Trading Commission (CFTC) invoked emergency authority to order Kalshi to continue trading in accordance with the Commodity Exchange Act’s core principles. This action followed Kalshi’s own notification of a market emergency after New York filed a lawsuit against the exchange. The federal regulator maintains that event contracts are interstate derivatives that fall outside the purview of state gaming laws. Washington, however, contends that each Kalshi bet involves staking money on a contingent event, thereby meeting the statutory definition of gambling.

Broader Legal Battles Over Prediction Markets

The CFTC has initiated lawsuits against nine states, including Illinois, Arizona, Connecticut, Wisconsin, and Minnesota, over the issue of prediction markets. President Donald Trump has publicly supported the CFTC, labeling state officials who oppose prediction markets as “SCUM.”

Kalshi’s Legal Setbacks in Washington

Kalshi has faced greater challenges in court than its federal ally. Thursday’s order builds upon a preliminary injunction granted in July, where the judge determined that “substantial injury to Washington consumers” was likely without such an injunction. The Washington Court of Appeals subsequently denied Kalshi’s request to stay that injunction.