Washington Judge Orders Kalshi Shutdown

Washington judge accuses Kalshi of willingly ignoring the law

In issuing his ruling, Judge McHale noted that Kalshi has "wilfully ignored" a notice from the Washington State Gambling Commission. The notice was informing them that offering event-based contracts is not authorized in the state. He wrote that Kalshi is offering illegal gambling to Washington players.

He also cited one of Kalshi's own advertisements that completely goes against the company's claim that prediction market event contracts are not a form of betting. The ad shows a text message exchange between two people. The message in the ad reads, “I found a way to bet on the NFL even though we live in Washington.”

Currently, the only way to bet on sports in Washington is in-person retail sports betting. And it is only available inside the state's tribal casinos.

“The public interests at stake and potential harm to consumers in the continued operation of Kalshi’s online gambling activities in the State of Washington outweigh harm to Kalshi,” McHale wrote.

Washington Attorney General supports Judge McHale's ruling

Washington Attorney General Nick Brown was celebrating Judge McHale's ruling. In March, Brown filed a lawsuit against Kalshi. The suit claims that Kalshi's prediction market platform violates the state’s Gambling Act and Consumer Protection Act. Putting a halt to Kalshi's prediction market products isn't the suit's only objective. It is also seeking to recover money lost by Washingtonians while playing on Kalshi's site.

In a statement reported by the Seattle Times, Brown gave credit to Judge McHale. He thanked him for taking the initial step in, “holding Kalshi accountable for their brazen violations of Washington law.”

“Kalshi padded their pockets as they promoted illegal betting on sports, elections, the total number of measles cases this year, what will witnesses say during a child trafficking hearing, and even natural disasters,” Brown's statement said.

Kalshi counters that the Washington court is overstepping its boundaries

In a statement issued to the Seattle Times, a Kalshi spokesperson insisted that states are overstepping their legal boundaries in court battles. They don't have the right to regulate prediction market sites.

Prediction markets are under federal regulations by the Commodities Futures Trading Commission (CFTC).

“Many courts — including the Third Circuit — have made this clear," the spokesperson said. "We’re disappointed to see Washington State continue wasting taxpayer dollars."

In April, the U.S. Court of Appeals for the Third Circuit ruled that New Jersey gaming regulators could not enforce state gambling laws against the platform.

Washington joins several other states in court battles with Kalshi. A Michigan judge recently ordered the site to geofence its sports-event contracts in the state. Minnesota is planning to ban all prediction markets as of August 1. Nevada and Massachusetts have also gained court injunctions against Kalshi.

Connecticut, Kentucky, Arizona, and Illinois are all engaged in legal action against Kalshi and fellow prediction market operator Polymarket.