Kalshi is facing another state-level lawsuit after Washington on Friday accused the prediction market operator of violating state gambling laws. The Washington Attorney General’s complaint cites the state’s ban on online gambling and alleges violations of the Washington Consumer Protection Act, Gambling Act, and Recovery of Money Lost at Gambling Act.
“Kalshi’s website and app show consumers a range of events that they can bet on and the odds for those various events, which dictate how much the bettor will be paid out if the event occurs,” Attorney General Nick Brown said in an announcement. The office argued Kalshi markets its service as a “prediction market” to avoid being called gambling, but that the platform’s mechanics “are exactly how sportsbooks and other gambling operations function.” Washington’s definition of gambling—staking or risking something of value on the outcome of a contest of chance or a future contingent event—was cited as encompassing Kalshi’s contracts, since each bet risks money, involves chance, and promises a payout to winners.
Kalshi immediately sought to move the case to federal court, saying the issues raised are already being litigated in other federal proceedings and that Washington provided “no warning or dialogue” before filing suit.
This action comes amid a flurry of state-level enforcement. Earlier in March a Nevada judge issued a temporary restraining order blocking Kalshi from operating in the state for 14 days, siding with the Nevada Gaming Control Board’s motion and finding state authorities likely to prevail on whether Kalshi’s event contracts violate Nevada gambling laws. Kalshi has argued that its contracts fall under the exclusive jurisdiction of the U.S. Commodity Futures Trading Commission, which has supported certain prediction markets in other disputes.
Arizona Attorney General Kris Mayes announced criminal charges days earlier, alleging Kalshi operated an “illegal gambling business in Arizona without a license” and offered illegal election wagering. Multiple states’ gaming authorities have filed similar suits claiming Kalshi offered sports gambling or other unlicensed wagering to residents.
State actions are unfolding alongside heightened scrutiny from lawmakers over prediction markets offering bets on U.S. military actions, with concerns about insider information and national security. The wave of litigation reflects a broader conflict between state gambling regulators and platforms that frame their offerings as prediction markets rather than traditional gambling operations.
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