Washington’s Kalshi Washington betting ban now requires the prediction-market operator to block state users from placing a broad set of event contracts, including sports and election wagers. King County Superior Court Judge John McHale’s order is limited to Washington, not a nationwide shutdown, and it remains part of a preliminary-injunction case rather than a final ruling on liability.
McHale ordered Kalshi to stop offering, accepting or facilitating covered wagers in Washington, and to stop advertising those wagers to Washington consumers. The Washington attorney general’s office announced the order on August 13.
What Kalshi bets are blocked in Washington?
The restrictions cover contracts on sports, elections and politics, plus entertainment, culture, technology, science and so-called “mentions” contracts. Those contracts let users stake money on whether a public figure will use particular words or phrases.
Kalshi calls its products prediction markets, but the state argues that the covered contracts meet Washington’s definition of gambling because customers risk money on uncertain future events in return for a potential payout. The court found Washington was likely to prevail on its claims under the state Gambling Act and Consumer Protection Act, according to the attorney general’s office.
That finding is a preliminary one. The underlying lawsuit continues, and the state is seeking recovery of Washington customers’ losses as well as civil penalties, the Washington State Standard reported.
When must Kalshi block Washington users?
- By August 19, Kalshi must deploy geofencing based on IP address and user residency.
- By September 2, it must have a multi-source geofencing system in place.
- Kalshi can let customers close positions they already hold, according to Ars Technica’s report on the order.
Failure to complete the required system by September 2 could expose Kalshi to penalties of up to $120,000 a day, though no such fine has been imposed. The company had asked the Washington Court of Appeals to pause the injunction, but that request was denied, the attorney general’s office said.
The order does not remove every Kalshi contract from Washington. The Washington State Standard reported that markets tied to commodities, climate, economics and finance can remain available. The dividing line is a court order, not a grand theory of what people call these products.
Why does Kalshi dispute Washington’s order?
Kalshi says the Commodity Futures Trading Commission has exclusive authority over its exchange and that state gambling law should not govern its contracts. A company spokesperson said Kalshi disagrees with McHale’s decision and is weighing legal options.
McHale rejected that argument at this stage, concluding that the federal Commodity Exchange Act does not preempt Washington’s gambling law, Ars Technica reported. The dispute is part of a wider fight between states trying to enforce gambling rules and prediction-market operators asserting federal derivatives oversight.
This story draws on original reporting from Ars Technica.
