Kalshi Blocked in Washington, Preemption Defense Fails

A King County judge has ordered prediction market operator Kalshi to stop offering its contracts to Washington bettors, granting the state a preliminary injunction on 21 July and rejecting the legal shield the company has used against regulators across the country. The court found Kalshi likely violated both the Washington Gambling Act and the state Consumer Protection Act by dressing up wagers as "prediction market trading."

In the ruling, the court held that the federal Commodity Exchange Act does not preempt Washington gambling law. That finding matters. Kalshi's entire defense rests on the claim that CFTC oversight of its markets blocks states from treating its contracts as gambling.

The judge disagreed, ruling that regulating futures is not the same as policing gambling and that Congress never meant federal commodities law to displace state enforcement. Attorney General Nick Brown said 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."

What Happens on August 5?

Both sides must file proposed injunction terms by August 3, and the court intends to enter its final order on August 5.

Washington is one of a growing list of states squeezing Kalshi in court, and this is among the first times a judge has flatly rejected its preemption argument in a gambling case. That hands other state regulators a tested playbook. Expect Kalshi to appeal.

What This Means for Players

If the final order stands, Washington users could lose access to Kalshi's sports and event contracts within weeks.