A Washington state judge has ordered prediction market operator Kalshi to stop offering its event contracts in the state, ruling that Washington is likely to succeed in its claims that the platform’s products violate state gambling laws.
The decision, issued by King County Superior Court Judge John McHale, grants the Washington Attorney General’s request for a preliminary injunction while the broader lawsuit against Kalshi moves forward. The court concluded that allowing the company to continue operating could cause substantial harm to consumers and that the public interest favors restricting its activities.
The final terms of the injunction are expected to be finalized on August 5, after both parties submit additional briefing on the scope of the order and possible remedies.
Washington Attorney General Nick Brown welcomed the ruling, arguing that Kalshi had been offering what the state considers illegal gambling products. According to the attorney general’s office, the platform accepted wagers on a wide range of events, including sporting contests, elections, disease outbreaks, natural disasters and other real-world occurrences.
Kalshi has consistently maintained that its event contracts are federally regulated financial products overseen by the U.S. Commodity Futures Trading Commission (CFTC), rather than gambling. However, Judge McHale found that Washington had shown a strong likelihood of proving that the contracts constitute illegal gambling under state law and rejected Kalshi’s argument that federal regulation automatically prevents state enforcement.
The Washington ruling adds to a growing series of legal setbacks for the prediction market operator. Courts have recently allowed state regulators in Massachusetts, Michigan, Nevada and New York to pursue enforcement actions or restrictions against Kalshi despite the company’s reliance on federal oversight arguments.
The legal battle reflects the broader conflict over whether sports and event prediction contracts should be treated as regulated financial derivatives or as gambling products subject to state gaming laws. As prediction markets continue to expand in popularity, courts across the United States are increasingly being asked to determine where regulatory authority ultimately lies.