Washington judge issues injunction halting Kalshi's sports and other wagers

A King County Superior Court judge issued a preliminary injunction requiring Kalshi, a prediction-market platform, to cease offering, accepting or facilitating wagers on sports, elections, politics, entertainment, culture, technology, science and "mentions" to Washington residents. The order also mandates the company install an IP-address and residency-based geofence by Aug. 19 and a multi-source geofencing solution by Sept. 2, with daily penalties of up to $120,000 for non-compliance.

Washington Attorney General Nick Brown said the order targets a substantial portion of Kalshi’s business, which has increasingly relied on sports wagers, and warned the state could seek recovery for fees and losses incurred by consumers after the compliance deadline.

Judge John McHale found that Kalshi is not licensed by the state gambling commission, is not registered to do business in Washington, and that its advertising suggesting "legal betting" in the state is likely to mislead consumers. He concluded that the platform’s marketing of illegal gambling activities constitutes unfair or deceptive practices under Washington law.

Kalshi’s spokesperson argued that the U.S. Commodity Futures Trading Commission (CFTC) has exclusive jurisdiction over prediction markets and that the company is regulated by the CFTC. The spokesperson said Kalshi disagrees with the court’s decision and is exploring legal options, noting that the firm has never offered markets on wildfires, war, death or terrorism.

The CFTC recently declared a "market emergency" in New York after a request from Kalshi, ordering the company to continue operating there. CFTC Chairman Michael Selig said Congress did not intend for derivatives exchanges to be regulated by a patchwork of state gambling laws. However, Judge McHale ruled that the Commodity Exchange Act does not expressly preempt Washington’s gambling statutes, allowing state courts to enforce their regulations.