Kalshi Alleges Selective Non-Enforcement in Washington State

Online prediction market Kalshi claims the Washington State Gambling Commission and the Attorney General’s office have engaged in “selective-nonenforcement” against its competitors, according to a letter obtained by The Spokane Spokesman-Review. This allegation follows a King County judge’s ruling restricting Kalshi’s operations within the state.

What Happened

Online prediction market Kalshi has accused the Washington State Gambling Commission and the state Attorney General’s office of “selective-nonenforcement” regarding other prediction markets. This claim was made in a letter from Kalshi’s legal representation to the Washington Gambling Commission, as reported by The Spokane Spokesman-Review. The letter asserts that the Attorney General’s office has not pursued action against other entities operating similar services, unlike its stance on Kalshi, which faces significant restrictions in the state following a King County judge’s determination that its activities violate state gambling laws.

The Attorney General’s office, through spokesperson Mike Faulk, disputes these claims, stating that Kalshi is the largest operator of its kind within Washington. Faulk clarified that under the law, the Attorney General is not obligated to prosecute all entities simultaneously to obtain a judgment against one. The Washington State Gambling Commission had not provided an immediate comment as of Monday, according to The Spokane Spokesman-Review.

Key Details

• Kalshi’s letter argues that the Attorney General’s office has “not taken any action against any other” prediction market besides Kalshi, as reported by The Spokane Spokesman-Review.
• Kalshi contends it operates under the exclusive jurisdiction of the federal Commodity Futures Trading Commission (CFTC), suggesting it is being treated differently from other designated contract markets, according to the letter.
• The letter specifically references Polymarket, alleging that it operates an unregistered, offshore platform offering event contracts prohibited by the CFTC, and has not faced enforcement actions from the Attorney General, as stated in the document.
• Superior Court Judge John F. McHale signed an order in August prohibiting Kalshi from offering or accepting event contracts related to sports, elections, politics, culture, and technology or science, as reported by The Spokane Spokesman-Review.
• This order followed a lawsuit by Washington Attorney General Nick Brown, who alleged Kalshi violated state gambling laws, which generally prohibit gambling except for sports wagers on tribal lands, according to The Spokane Spokesman-Review.
• Mike Faulk, a spokesperson for the Attorney General’s office, stated that Kalshi’s claim of selective non-enforcement is “not true at all” and that Kalshi is the largest entity of its kind, according to The Spokane Spokesman-Review.
• The 9th U.S. Circuit Court of Appeals ruled 3-0 that Kalshi was unlikely to demonstrate federal law preempted Nevada state law, in a decision issued on Friday, according to the Spokane Spokesman-Review.

Why It Matters

This situation highlights the ongoing tension between state-level gambling regulations and the operations of federally regulated prediction markets. Kalshi’s claim of selective non-enforcement suggests a perceived inconsistency in how state authorities apply existing laws to different market participants, particularly when some claim federal oversight. The judicial actions in Washington and other states, such as Nevada, underscore the fragmented regulatory landscape for prediction markets in the United States. The varying court outcomes, including the 9th U.S. Circuit Court of Appeals ruling regarding federal preemption in Nevada and a separate federal appeals court decision allowing Kalshi to operate in New Jersey, indicate a lack of uniform regulatory clarity across jurisdictions for these financial instruments.

What’s Next

A hearing in the case is scheduled for Wednesday, according to The Spokane Spokesman-Review.

Originally reported by Spokane Spokesman-Review·Published 31 Aug 2026, 22:29