A King County Superior Court judge in Washington has ordered Kalshi to cease offering its most popular markets in the state. This ruling marks another legal setback for the prediction market operator as state regulators push back against its operations. Judge John McHale issued the order on Thursday after previously granting a preliminary injunction that aimed to enforce Washington's gambling laws against the company.
In his ruling, McHale stated, "The State has demonstrated a well-grounded fear of immediate invasion of consumers’ legal rights… Kalshi has willfully ignored a Washington State Gambling Commission notice stating that offering event-based contracts is not authorized in Washington state."
The judge's decision specifically blocks Kalshi from listing markets within several categories, including Culture, Elections, Politics, Science, Sports, and Technology. Washington Attorney General Nick Brown commented on the ruling, saying, "Kalshi has gotten rich promoting wagers on sports, elections, natural disasters, events related to the Iran War, and more. Under this order, Kalshi is banned from offering wagers on most of those topics in Washington. As this case moves forward, we will continue to enforce Washington law and hold Kalshi accountable for misleading consumers."
This partial ban reflects a shift from court rulings in other states, as Kalshi recently achieved a legal victory in Minnesota. That decision hinged on a new law restricting event contracts, which was deemed likely to infringe on federal jurisdiction.
Additionally, Judge McHale has mandated that Kalshi must implement comprehensive geofencing by September 3. The company previously withdrew from Nevada due to similar geofencing requirements, and while it made concessions in Michigan, technical issues remain unresolved there.
Operators of prediction markets argue in court that state-mandated geofencing could conflict with federal regulations that require uniform access to event contracts. However, geofencing is standard for regulated online sports betting and iGaming firms, as per compliance with the federal Wire Act.
McHale emphasized the distinction between gambling regulation and futures market regulation, asserting, "Allowing for continued State regulation of activities that fit within the legal framework of gambling in the State of Washington under RCW 9.46 does not subvert the purpose of the CEA to uniformly regulate actual futures trading… Complying with Washington law would not prevent Kalshi from complying with applicable Federal law."
Failure to meet the geofencing requirements could lead to substantial penalties for Kalshi, amounting to daily fines of up to $120,000 for non-compliance.
Beyond the trading ban and geofencing orders, McHale also instructed Kalshi not to advertise or market its services within Washington. The ruling mandates that the company make sincere efforts to exclude the state from any national advertising campaigns, an order that may carry heightened relevance as the NFL football season approaches. Historically, this period sees increased customer acquisition activities for U.S. betting operators, with 2026 anticipated to be particularly competitive due to the emergence of prediction markets in an already saturated advertising landscape.
