Kalshi has blocked user access in Washington State and has requested the King County court to reconsider the injunction restricting its prediction market business. The controversy surrounding this case has expanded from a single-state enforcement issue to a conflict between federal regulatory authority and state gambling laws.
The court has ordered continued traffic restrictions.
Washington State requires Kalshi to block residents of the state from accessing contracts on seven categories of events, in accordance with the revised preliminary injunction. The court also ordered the company to implement IP address and residency-based controls by August 19 and to launch a more comprehensive geolocation system by September 2.
Kalshi compares the OG arrangement.
In its motion filed on August 21, Kalshi alleged that the state of Washington provided more favorable treatment to its competitor, the North American Derivatives Exchange (OG). The company argued that this undermines the state’s prior claim that continuing trading would cause immediate consumer harm. The court has not yet accepted this assertion, and Judge John McHale will decide on September 2 whether to reconsider the matter without scheduling oral arguments.
Multi-state litigation is ongoing.
In addition to Washington, Michigan and Nevada also restrict access to Kalshi. Kalshi maintains that event contracts regulated by the CFTC are derivatives and should not be subject to state gambling laws regarding listing and trading. Meanwhile, CFTC Chair Michael Selig stated that the agency will soon propose rule revisions addressing consumer protection, market governance, and product standards.
Additional information: Washington State’s restrictions cover contracts in sports, elections, politics, entertainment, culture, technology, and science, as well as certain “mentions” markets.