A Washington court ordered Kalshi to halt most prediction market offerings and geofence state users by Sept. 2, citing violations of state gambling law.
A Washington court has ordered prediction market platform Kalshi to stop offering the majority of its event contracts to users in the state, ruling that the company likely violated Washington's gambling regulations. The final order was issued Aug. 13 and covers a wide range of contract categories.
Restricted markets include those tied to sports, elections, politics, entertainment, culture, technology, science, and "mentions." Contracts related to commodities, climate, economics, and finance are not covered by the restriction and may continue operating in Washington.
Geofencing Deadlines Set for August and September
The court set two deadlines for Kalshi to comply. By Aug. 19, the company must have an IP address and residency-based geofence in place to block Washington users from reaching the restricted markets. A broader, multi-source geofencing system must be operational by Sept. 2. Kalshi is also barred from advertising the restricted products to Washington consumers. The court found that marketing illegal gambling constitutes unfair or deceptive practices under state law.
Washington Attorney General Nick Brown said the company had profited from wagers on sports, elections, natural disasters, and events tied to the US-Iran conflict. "Under this order, Kalshi is banned from offering wagers on most of those topics in Washington," Brown said. "As this case moves forward, we will continue to enforce Washington law and hold Kalshi accountable for misleading consumers."
The order is an extension of a preliminary injunction first granted in July. Kalshi asked the Washington Court of Appeals for a stay, which was denied. The Block reached out to Kalshi for comment at the time of reporting but had not received a response by publication.
State Pressure Mounts as Federal Dispute Continues
Washington's action is part of a growing pattern of state-level challenges against Kalshi. Multiple states have argued that the company's contracts, particularly those tied to sports results, amount to illegal gambling under local law. Kalshi has taken the position that federal law gives the Commodity Futures Trading Commission exclusive oversight of its operations, which would override state gambling statutes.
Related Article: Kalshi Streams Live Order Book Data to Trading Firms via DoubleZero
The legal pressure expanded on Aug. 13 when Baltimore, Maryland's most populous city, filed a separate lawsuit against Kalshi and rival platform Polymarket over the same illegal gambling allegations. That lawsuit also named Coinbase, Robinhood, and Webull as defendants.
The conflict places Kalshi at the center of an unresolved legal question: whether federally regulated prediction markets can operate freely across all US states, or whether each state retains the authority to prohibit them under its own gambling laws.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of Vortex, and Vortex is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. Vortex is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by Vortex of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of Vortex.
