Washington judge finds Kalshi’s online gambling violates state law
PORTLAND, Ore. (KOIN) – A King County Superior Court judge found that Kalshi likely violated the Washington Gambling Act and the Consumer Protection Act by running an illegal gambling operation in Washington state.
On Monday, the judge’s finding won the Office of the Attorney General a preliminary injunction in its case against KalshiEX (Kalshi).
The company operates and advertises an online platform where users can bet money on sports and many other kinds of events.
On August 5, the Court will issue a final order prohibiting Kalshi from continuing to violate Washington law, giving Kalshi and the Attorney General’s office time to confer on the terms of the injunction and provide further details to the Court about appropriate remedies.
“This victory is the first step toward holding Kalshi accountable for their brazen violations of Washington law,” said Attorney General Nick Brown. “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.”
According to the Attorney General’s office, in 2006, the Washington Legislature amended the 1973 Gambling Act to make it clear that internet gambling is prohibited under state law.
On Monday, the court ruled that “Kalshi’s provision, marketing, and advertising of illegal gambling activities constitute unfair and/or deceptive acts or practices.”
To win the preliminary injunction, the state was required to show that it was likely to succeed on its claims against Kalshi as the case progresses, as well as a likelihood of “substantial injury to Washington consumers.”
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Seattle judge deals blow to Kalshi, rejects prediction market’s federal defense
A judge in Seattle issued a preliminary injunction against Kalshi, finding that Washington state is likely to prove that the fast-growing prediction market is running illegal online gambling.
The ruling by King County Superior Court Judge John McHale, issued Monday, does not immediately halt Kalshi’s operations in the state. McHale granted the injunction in the case brought by Washington AG Nick Brown, but deferred the specifics until early next month.
McHale rejected Kalshi’s argument that oversight by the U.S. Commodity Futures Trading Commission preempts state gambling laws. That has been the basis of Kalshi’s defense against regulators across the country. Washington is the latest state where a court has shot it down.
Kalshi quickly pushed back on the ruling.
“States don’t have jurisdiction to regulate prediction markets. Many courts — including the Third Circuit — have made this clear,” spokesperson Jacki McGavick said in a statement. “We’re disappointed to see Washington State continue wasting taxpayer dollars.”
In his ruling, McHale said Kalshi “willfully ignored” a December 2025 notice from the Washington State Gambling Commission that event-based contracts were not authorized in the state, and cited a Kalshi ad showing a text exchange where one user tells another: “I found a way to bet on the NFL even though we live in Washington.”
Kalshi’s platform lets users bet “yes” or “no” on thousands of events across sports, elections, entertainment, and so-called “mention markets” — wagers on whether public figures will say specific words. The New York-based company, which markets itself as a federally regulated “prediction market,” takes a transaction fee on each bet.
Washington has some of the strictest gambling laws in the country: the legislature banned
nternet gambling in 2006, and while the state allows a lottery, horse racing, and tribal-casino gambling, online betting is broadly prohibited and sports wagers are legal only in person on tribal lands.
The order requires Kalshi to preserve all records tied to Washington users, including logs, communications, geolocation data and marketing materials.
The specific operational terms of the injunction are still being determined: McHale gave both sides until Aug. 3 to submit proposed language, with a full order to follow by Aug. 5.
https://www.geekwire.com/2026/seattle-judge-deals-blow-to-kalshi-rejects-prediction-markets-federal-defense/