A judge in Washington State, USA, has issued a final order requiring the prediction market platform Kalshi to cease offering various event contracts in the state. State prosecutors stated that the court found Kalshi likely violated Washington State’s Gambling and Consumer Protection Laws, with its operations constituting an illegal gambling enterprise.
The court has ordered the platform to be taken down within a specified timeframe and to implement geofencing.
Pursuant to the order, Kalshi is prohibited from offering, accepting, or facilitating bets on a wide range of categories in Washington State, including sports, elections, politics, entertainment, culture, technology and science, as well as "mentions" contracts—products that allow users to bet on whether a public figure will utter a specific word.
The court also required the platform to implement IP address- and residence-based geofencing by August 19 and to launch a multi-source geofencing solution by September 2. The State Attorney General’s Office stated that the restricted contract categories already cover a significant portion of Kalshi’s business, with sports-related products accounting for an increasing share.
Advertising promotion is also prohibited.
The court also prohibited Kalshi from advertising the above contracts in Washington State, determining that marketing such products could constitute "unfair or deceptive practices."
The state prosecutors, in their filing, noted that Kalshi had posted a promotional message showing a user texting that they had “found a way to bet on the NFL even while living in Washington.” Based on this, the prosecutors argued that the platform was aware its product was circumventing state legal restrictions.
State governments are in direct conflict with the CFTC.
Two days before this ruling, the U.S. Commodity Futures Trading Commission (CFTC) exercised its emergency powers to require Kalshi to continue operating in accordance with the core principles of the Commodity Exchange Act. The decision followed the platform’s notification to regulators of a so-called "market emergency" after it was sued in New York.
The CFTC's position is that event contracts constitute interstate derivatives trading and should not be subject to state gambling laws. Washington State, however, argues that each bet on Kalshi involves wagering money on the outcome of an uncertain event, which meets the state's legal definition of gambling.
In response to this issue, Kalshi has sued nine states. The lawsuits initially involved Illinois, Arizona, and Connecticut, and later expanded to include Wisconsin and Minnesota. During this time, Trump publicly supported Kalshi and criticized state officials who opposed prediction markets.
The previous temporary ban has sent a clear signal.
This final order builds upon a preliminary injunction issued in July, when the judge determined that Washington State consumers would likely suffer "substantial harm" if Kalshi were allowed to continue operating.
Afterward, the Washington State Court of Appeals also denied Kalshi’s request for a stay. This means that, despite Kalshi’s support from federal regulators, resistance against it at the state court level continues to grow.