OLYMPIA – Online prediction betting market Kalshi faces an uncertain future in Washington after a King County Superior Court Judge found that it likely violates state gambling laws.
What Happened
The order by Judge John McHale follows a lawsuit filed by state Attorney General Nick Brown, who alleged that the company operates in “direct violation” of state laws that prohibit gambling, except for sports wagers placed on tribal lands. Judge McHale, in his ruling Monday, stated, “Kalshi has willfully ignored a Washington State Gambling Commission notice stating that offering event-based contracts is not authorized in Washington state.” He has granted the state’s request for a preliminary injunction, though Kalshi and the state have until Aug. 3 to discuss its terms and brief the court about potential remedies. Brown celebrated the decision, declaring, “This victory is the first step toward holding Kalshi accountable for their brazen violations of Washington law.” He accused Kalshi of profiting from illegal betting on a wide range of topics, including sports, elections, health crises, legal proceedings, and even natural disasters.
Key Details
- King County Superior Court Judge John McHale ruled Kalshi likely violates Washington state gambling laws.
- The ruling follows a lawsuit from Attorney General Nick Brown alleging illegal operation.
- A preliminary injunction has been granted, with terms to be discussed by Aug. 3.
- Kalshi, founded in 2018 and launched in 2021, markets itself as a ‘regulated exchange & prediction market’.
- Over 90% of Kalshi’s activity and 89% of its revenue last year came from sports betting.
- The company expanded its operations in Washington last year, allowing bets on specific game outcomes and player statistics.
- Kalshi is accessible to anyone 18 or older via phone apps or online, with a trading volume of $23.8 billion in 2025.
- Washington joins other states, including Arizona and Nevada, in taking legal action against Kalshi.
- Federal courts permanently blocked criminal charges against Kalshi in Arizona, but a Nevada judge banned its operation in that state due to lack of a gambling license.
- Washington Sens. Maria Cantwell and Patty Murray, along with 10 other U.S. senators, have advocated for further regulation of prediction markets.
Why It Matters
The ruling in Washington state adds to the growing legal challenges faced by Kalshi across the country, highlighting the ongoing debate about the classification of prediction markets and their compliance with state gambling regulations. Attorney General Brown’s lawsuit contends that Kalshi’s operations violate both the Washington state Gambling Act and Consumer Protection Act, emphasizing the state’s intent to hold the company accountable and potentially seek damages for money taken from Washingtonians. This case could set a precedent for how other states regulate similar platforms, especially given that a significant portion of Kalshi’s activities are sports-related, an area typically subject to strict gambling laws. The involvement of U.S. Senators in pushing for further regulations underscores the broader national interest in overseeing such platforms and protecting consumers.