A Washington state judge has ordered prediction market platform Kalshi to stop offering a broad set of event contracts to users in the state, rejecting Kalshi’s argument that federal commodities law preempts Washington’s gambling statutes. King County Superior Court Judge John McHale barred Kalshi from offering contracts tied to sports, elections, politics, entertainment, culture, technology, science and “mentions.” Contracts related to commodities, climate, economics and finance were left exempt from the order.
Washington Attorney General Nick Brown described the ruling as holding Kalshi accountable for operating an illegal gambling business in the state. The amended order, signed Wednesday, specifies the terms of a preliminary injunction McHale first granted in July. The judge concluded that the Commodity Exchange Act does not preempt Washington’s gambling law and found the state had shown a likelihood of success on claims under three state statutes.
Under the injunction, Kalshi must implement IP-address and residency-based geofencing by Aug. 19 and deploy a GeoComply multi-source geofencing system by Sept. 2 to prevent residents of Washington from buying the contracts covered by the order. Kalshi maintains that the Commodity Futures Trading Commission has exclusive jurisdiction over its exchange; the Washington Court of Appeals denied Kalshi’s request to stay the injunction.
The ruling narrows the types of prediction contracts Kalshi can offer to Washington users, while allowing markets tied to traditional financial and commodity indicators to continue. The case centers on whether state gambling laws apply to Kalshi’s event contracts or whether federal commodities law and CFTC oversight displace those state rules.
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