In brief
- A Washington judge has ordered Kalshi to stop offering wagers on sports, elections, politics, entertainment, culture, tech and science, and “mentions” in the state.
- Kalshi must have an IP and residency geofence running by August 19, and a multi-source solution by September 2.
- The order lands two days after the CFTC used emergency powers to order the exchange to keep operating.
A King County Superior Court judge has issued a final order requiring Kalshi to shut down most of its Washington business, after finding the exchange likely broke the state's Gambling Act and Consumer Protection Act by running an illegal gambling operation, the state attorney general's office said on Thursday.
The order bars Kalshi from offering, accepting or facilitating wagers on sports, elections, politics, entertainment, culture, tech and science, and on “mentions,” where users bet on whether a public figure will say particular words. It must have an IP address and residency-based geofence in place by August 19 and a multi-source geofencing system by September 2. The attorney general's office said the categories cover a substantial part of a business “increasingly driven” by sports.
Attorney General Nick Brown said Kalshi had “gotten rich promoting wagers on sports, elections, natural disasters” and events tied to the Iran war, adding that his office would keep holding the exchange to account.
The court also barred Kalshi from advertising the covered contracts in Washington, ruling that its marketing of illegal gambling amounted to “unfair and/or deceptive acts or practices.” The state's complaint cites one Kalshi promotional tweet in which a person texts a friend to say they had “found a way to bet on the NFL even though we live in Washington,” which the attorney general's office argues shows the company knew it was working around state law.
States versus CFTC
The ruling arrives two days after the Commodity Futures Trading Commission invoked emergency authority to order Kalshi to keep trading in line with the Commodity Exchange Act's core principles, acting on the exchange's own notification of a market emergency after New York sued it. The federal regulator's position is that event contracts are interstate derivatives beyond the reach of state gaming law, while Washington's is that each Kalshi bet stakes money on a contingent event and therefore meets the statutory definition of gambling.
The agency has sued nine states over the question, beginning with Illinois, Arizona and Connecticut and continuing through Wisconsin and Minnesota, which it sued within hours of that state's ban taking effect. President Donald Trump has backed the agency, calling state officials who oppose prediction markets “SCUM.”
Kalshi has had less success in court than its federal ally. Thursday's order builds on a preliminary injunction granted in July, in which the judge found “substantial injury to Washington consumers” was likely without one, and the Washington Court of Appeals refused Kalshi's request to stay it.
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