The digital landscape of prediction markets has recently faced a significant shift in Washington State. A King County Superior Court judge has issued a final order requiring Kalshi a popular prediction market platform, to cease many of its operations within the state. The order comes after the court found that Kalshi likely violated the Washington Gambling Act and the Consumer Protection Act by running an illegal gambling operation.
The order mandates that Kalshi stop offering, accepting, or facilitating wagers on a wide range of topics, including sports, elections, politics, entertainment, culture, tech, and science. This restriction is a substantial blow to Kalshi’s business, which has seen a significant increase in sports wagers in recent years. The platform must implement an IP address and residency-based geofence by August 19 and a more comprehensive geofencing solution by September 2.
Legal Battles and Court Rulings
The order is part of a preliminary injunction granted by the court in July 2026. The judge found that Kalshi was likely violating the law and that substantial injury to Washington consumers was likely to occur without an injunction. Kalshi’s request to stay this injunction was denied by the Washington Court of Appeals.
According to Washington law, gambling is defined as “staking or risking something of value upon the outcome of a contest of chance or a future contingent event.” The court ruled that Kalshi’s activities fall squarely within this definition. Each bet on Kalshi risks money, relies in part on chance, and promises a payout to winners, mirroring the operations of traditional sportsbooks and gambling platforms.
Advertising Restrictions and Consumer Protection
The court also banned Kalshi from advertising to Washington consumers about the wagers covered by this injunction. The ruling stated that “Kalshi’s provision, marketing, and advertising of illegal gambling activities constitute unfair and/or deceptive acts or practices.” Kalshi has previously advertised its service as a “prediction market” rather than a gambling platform, implying that its service is legal when it is not.
Additionally, the court banned Kalshi from offering bets on “mentions,” where users can bet on whether a public figure will say particular words. This type of betting is considered particularly unfair to consumers due to the potential for cheating by people close to the source.
The Broader Implications
Washington State has a long history of carefully regulating gambling activities to protect and safeguard the public. The state’s constitution has prohibited gambling on state lands since its inception in 1889. In 2006, the Legislature amended the 1973 Gambling Act to explicitly prohibit internet gambling. The Attorney General’s office will continue to enforce these laws.
Kalshi’s spokesperson, Jacki McGavick, argued that the company is regulated by the Commodity Futures Trading Commission (CFTC) which has exclusive jurisdiction over their exchange. However, the court’s decision stands, and Kalshi is considering all legal options.
This case is part of a broader trend of states seeking to regulate or restrict prediction markets. In March, a judge in Nevada banned Kalshi from operating in the state because it did not obtain a gambling license. The ban remains in effect.
For those affected by gambling addiction or gaming disorder, the Washington State Problem Gambling Helpline is available at 1-800-547-6133. Consumers wanting to file a complaint with the Consumer Protection Division can call 1-800-551-4636 or visit the Attorney General’s website.
