Washington court orders Kalshi to halt most prediction market contracts

A Washington state court orders prediction market Kalshi to halt most of its event contracts, including sports and elections, ruling the platform likely violated state gambling laws. Kalshi must implement geofencing by August 19, 2026, or face daily fines up to $120,000. This ruling conflicts with the federal Commodity Futures Trading Commission, which ordered Kalshi to continue operating, arguing that event contracts are federally regulated interstate derivatives.

Washington court injunction against Kalshi

• ▪The Washington state court order prohibits Kalshi from advertising the restricted prediction market contracts to consumers within Washington state.
• ▪King County Superior Court Judge John McHale issued a final order requiring prediction market platform Kalshi to halt most of its event contracts in Washington state.
• ▪The Washington state court order requires Kalshi to implement IP address and residency-based geofencing by August 19, 2026, and a multi-source geofencing system by September 2, 2026.
• ▪Kalshi faces potential penalties of up to $120,000 per day if the platform fails to implement the required multi-source geofencing system by September 2, 2026.

Prohibited prediction market categories

• ▪Under the Washington state court order, Kalshi users in Washington are permitted to close their existing positions in the prohibited contract categories.
• ▪The Washington state court order allows Kalshi to continue offering contracts related to commodities, climate, economics, and finance to Washington residents.
• ▪The Washington state court order bars Kalshi from offering wagers on sports, elections, politics, entertainment, culture, technology, science, and public figure word "mentions."

State gambling law conflict

• ▪Washington Attorney General Nick Brown sued Kalshi in March 2026, alleging the platform operated an illegal gambling business under the state's Gambling Act and Consumer Protection Act.
• ▪The Washington state court found that Kalshi likely violated state gambling and consumer protection laws by operating an illegal gambling operation and engaging in unfair marketing.
• ▪Washington state officials argue that each Kalshi bet stakes money on a contingent event, thereby meeting the statutory definition of gambling under state law.

CFTC emergency order supporting Kalshi

• ▪The Commodity Futures Trading Commission maintains that event contracts are interstate derivatives that fall under federal regulation and are beyond the reach of state gaming laws.
• ▪Two days prior to the Washington court order, the Commodity Futures Trading Commission invoked emergency authority ordering Kalshi to keep trading under the Commodity Exchange Act.

Multi-state legal battles

• ▪The Commodity Futures Trading Commission has sued nine states, including Illinois, Arizona, Connecticut, Wisconsin, and Minnesota, over the regulation of prediction markets.
• ▪President Donald Trump has publicly supported the Commodity Futures Trading Commission's stance on prediction markets, calling state officials who oppose them "SCUM."

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