Kalshi ordered to stop most operations in WA

Kalshi, the online prediction market, must stop most operations in Washington by the middle of next week, a King County judge ordered Thursday, finding that the company is running a gambling operation that is illegal under state laws.

Attorney General Nick Brown had sued Kalshi in March, accusing the company of violating Washington’s relatively strict anti-gambling laws, and using the company’s own advertising — it had boasted that it allowed people to “bet on everything” — to prove the point.

“Kalshi operates an online betting platform,” King County Superior Court Judge John McHale wrote in a preliminary injunction Thursday, adding that the company likely is violating multiple provisions of state law.

McHale had previously ruled that the company likely violates Washington law, but until Thursday had not said when it must cease operations or for how long.

Kalshi has appealed the injunction and the case is also progressing toward trial.

On Thursday, McHale said the company must stop accepting bets or contracts in Washington on anything related to sports, elections, politics, entertainment, culture, tech and science. It may continue accepting bets or contracts on things like economics, finance, climate and commodities, McHale said.

Prediction markets have rapidly become part of the fabric of American culture. Kalshi has partnerships with The Associated Press, CNN, CNBC and the National Hockey League.

It offers customers the chance to win or lose money predicting the outcome of almost anything — sports, elections, international conflict, celebrity weddings and more.

You can wager on traffic through the Strait of Hormuz, Iran’s next leader, whether Anthony Fauci will be charged with a crime and how many posts the president will make on social media.

Kalshi has argued that it is a prediction market, regulated by the federal Commodity Futures Trading Commission, not state laws.

The CFTC “has exclusive jurisdiction over our exchange,” Kalshi spokesperson Jacki McGavick wrote in an email Thursday. “We respectfully disagree with the court’s decision and are considering all legal options.”

The CFTC, under President Donald Trump, has been friendly to the company and its largest competitor, Polymarket, suing at least nine states over their efforts to regulate the companies.

“We will see you in court,” CFTC Chair Mike Selig threatened last spring, warning states against trying to regulate the companies.

In July, after a judge in Michigan ordered Kalshi to stop offering sports bets in the state, the CFTC stepped in and told Kalshi not to cancel pending bets, in violation of the judge’s order. State lawmakers in Minnesota passed a law banning prediction markets in the state, but the law was blocked by a federal judge after the CFTC sued.

Attorneys general of both parties, in multiple states — including Arizona, Connecticut, Kentucky, Nevada, Massachusetts, Maryland, New York, New Jersey, Montana and Ohio — have taken legal action to stop or restrict Kalshi.

The Trump family stands to benefit from the rise of prediction markets. Donald Trump Jr. is  a strategic adviser to both Kalshi and Polymarket, and his venture capital fund has invested in Polymarket.

McHale ordered Kalshi to implement geofencing on its site to ensure that IP addresses within Washington cannot place bets or purchase contracts on the site. He ordered the company to have geofencing implemented by Aug. 19 and a more sophisticated geofencing in place by Sept. 2 or face a $120,000-a-day fine until it is complete. He also ordered the company to stop advertising and marketing in Washington.

“Kalshi has gotten rich promoting wagers on sports, elections, natural disasters, events related to the Iran War, and more,” Brown said in a statement. “As this case moves forward, we will continue to enforce Washington law and hold Kalshi accountable for misleading consumers.”

McHale said the company must continue to let Washington residents close their accounts and withdraw funds.