Kalshi ordered to sharply curtail operations in WA

This comes weeks after McHale had ruled against Kalshi, and for the state attorney general’s office, which sued the company in March. The geofencing requirement is similar to orders from judges in Michigan and Nevada, though regulators in the latter state accused Kalshi of flouting it.

Kalshi had asked a state appeals court to pause McHale’s injunction, but the court denied the request.

If Kalshi doesn’t comply by Sept. 2, it will face $120,000 in daily fines to the state or has to explain why this solution isn’t complete. Then it would be up to McHale to decide if Kalshi did enough to implement what he ordered.

Wagers still allowed include those related to commodities, climate, economics and finance. In addition to sports and politics, wagers on entertainment, culture, tech and science are blocked.

The ruling also banned Kalshi from advertising to Washington consumers about wagers restricted under McHale’s order.

“Kalshi has gotten rich promoting wagers on sports, elections, natural disasters, events related to the Iran War, and more,” Attorney General Nick Brown said in a statement. “As this case moves forward, we will continue to enforce Washington law and hold Kalshi accountable for misleading consumers.”

Kalshi spokesperson Jacki McGavick argued the company is exclusively regulated by the federal Commodity Futures Trading Commission.

“We respectfully disagree with the court’s decision and are considering all legal options,” McGavick said in an email.

The case

Online gambling is mostly banned in Washington, with exceptions for sports wagering on tribal lands. Sports bets are also allowed in person at tribal casinos.

Kalshi, based in New York, offers “prediction markets” on a variety of events, ranging from sports and entertainment to politics and even the weather. You can wager on the peak national debt under President Donald Trump, whether this year will see more tech sector layoffs than 2025 or whether the Mariners will win a given game.

Even whether public figures will say certain words during speeches is fair game. These bets are now not allowed in Washington under the court order.

Earlier this year, users could place wagers on whether Washington would adopt its new income tax on high earners. The company also targeted advertisements to Washington customers telling them they could bet on the NFL even in Washington.

Kalshi earns a transaction fee on each bet. Kalshi and Polymarket run the largest of these platforms.

In his lawsuit, Brown argued Kalshi’s prediction markets essentially act the same as gambling, but with different lingo.

In December, the state’s Gambling Commission issued guidance saying that “offering events-based contracts or participating in these markets is not authorized in Washington State.” McHale wrote that Kalshi has “willfully ignored” this notice.

The judge cited the rise in gambling addiction as part of the reasoning for his decision. A 2021 state study found that residents who gamble online were substantially more likely to have moderate to severe gambling problems compared to those who only wagered at brick-and-mortar venues.

Kalshi is facing similar legal challenges in other states, and there are concerns of users capitalizing on insider information to make wagers.

The Trump administration has gotten involved. On Tuesday, the federal Commodity Futures Trading Commission told Kalshi to continue operating, after a federal judge batted down the company’s attempts to nix a lawsuit filed by the New York state attorney general that hopes to shut down Kalshi nationwide.

“Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws,” commission Chair Michael S. Selig said in a statement Tuesday. “These are financial exchanges that offer financial instruments and operate across state lines.”

The commission has also sued several states to stop them from blocking prediction markets like Kalshi, arguing federal law preempts state policies.

Washington’s case will continue, as the state attorney general is also seeking to recover money Washington bettors have lost on the platform and assess civil penalties.