A US judge has ordered prediction market platform Kalshi to block most of its event contracts in Washington state. The ruling stems from a determination that the company is likely violating local gambling regulations.
Operational Restrictions and Penalties
King County Superior Court Judge John McHale issued the preliminary injunction, citing concerns regarding gambling addiction. Under the order, Kalshi must stop accepting bets on sports, elections, politics, entertainment, culture, technology, and science within the state. The platform is also prohibited from advertising these restricted products to Washington consumers.The court mandated strict technical compliance deadlines. Kalshi must implement an initial geofencing system by August 19 and a more advanced version by September 2 to prevent residents from accessing the restricted contracts. Failure to adhere to these requirements could result in daily fines of $120,000. Users retain the right to close accounts and withdraw funds.
Legal Dispute and Company Response
Washington Attorney General Nick Brown initiated the lawsuit in March, arguing that event contracts constitute gambling rather than financial products. He noted that the company had "wilfully ignored" guidance from the state Gambling Commission. Brown is seeking to recover money lost by bettors and impose civil penalties.Kalshi has appealed the injunction and stated it is considering further legal action. Spokesperson Jacki McGavick asserted that the CFTC holds exclusive jurisdiction over the exchange.