Prediction markets keep colliding with state gambling laws, and Kalshi just lost another round.
A King County Superior Court judge ordered the New York exchange to wall off Washington state users from sports, elections, politics, entertainment, culture, tech and science markets by September 2, along with “mentions” contracts on whether public figures say specific words. Commodities, climate, economics and finance markets can stay, and existing positions can be closed out.
Judge John McHale also refused to pause the order during Kalshi’s appeal and set a $120,000-a-day fine for missing the deadline, the same figure Nevada regulators are chasing in a June contempt motion over a similar injunction.
The judge found that Kalshi brushed off a December 2025 notice from the Washington State Gambling Commission declaring event-based contracts unauthorized, and concluded that the public interest and potential harm to consumers outweigh any damage the injunction causes the company.
Kalshi disagrees, repeating its position that the Commodity Futures Trading Commission has exclusive jurisdiction over the exchange. Washington Attorney General Nick Brown, who filed suit in March, holds that state law governs, making this one of several state-level battles over event contracts the federal regulator once cleared.
