Washington Court Orders Kalshi to Halt Event Markets

Jonathan Rodriguez

Written by: Jonathan Rodriguez

Published: Mon Aug 17, 2026, 7:00 am ET

Read Time: 4 minutes

Washington Court Orders Kalshi to Halt Event Markets

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Kalshi faces another setback after a Washington court ordered it to stop offering most event contracts. The ruling blocks several popular markets for Washington residents. It also requires Kalshi to strengthen its geofencing systems.

The decision follows months of legal action by Washington Attorney General Nick Brown. His office sued Kalshi in March, alleging the company operated illegal gambling in the state.

The latest ruling could also influence how other states approach prediction markets. As a result, Kalshi faces growing pressure over its expanding sports and event-based products.

Washington Court Restricts Kalshi's Event Contracts

King County Superior Court Judge John McHale ordered Kalshi to stop offering and advertising several event contracts. The order followed his earlier preliminary injunction finding that Kalshi likely violated Washington gambling laws.

Judge McHale found that Washington demonstrated a strong likelihood of success in its case against Kalshi. He also determined that continued operations could cause substantial harm to Washington consumers.

The dispute began in March, when Attorney General Brown filed a lawsuit against Kalshi. The complaint accused the company of violating the Washington Gambling Act and Consumer Protection Act. Brown also sought to recover money lost by Washington residents.

At the time, Brown argued that Kalshi was disguising gambling as a financial product. He pointed to sports, elections, wars, and other event-based wagers available through the platform.

The Attorney General later highlighted the scope of the court's restrictions in a press release, 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,"

The order requires Kalshi to block affected contracts for Washington residents. It also requires stronger location controls to prevent users from accessing restricted markets.

Kalshi must implement IP address and residency-based geofencing by August 19. It must then deploy a multi-source geofencing system through GeoComply by September 2.

The company could face penalties of up to $120,000 per day for failing to meet the requirements. Existing users can still close positions and withdraw their funds.

Major Categories Affected by the Washington Restriction

The restrictions cover several major categories on Kalshi, including:

  • Sports
  • Elections
  • Politics
  • Entertainment
  • Culture
  • Technology
  • Science
  • Mentions
  • Other event-based contracts

Sports markets represent a particularly significant setback for Kalshi. The company has increasingly focused on sports prediction contracts during its expansion into the US betting market.

Those contracts have also placed Kalshi in direct competition with traditional US online sportsbooks. Kalshi offers products resembling spreads, over/unders and player proposition wagers. Washington officials argue those products function as gambling under state law.

The restriction therefore represents a major development for Washington gambling regulation. State officials maintain that Kalshi cannot avoid gambling laws simply by describing its products as prediction markets.

Importantly, Washington has not completely banned Kalshi.

The court allows Kalshi to continue offering certain contracts involving commodities, climate, economics and finance. Therefore, the ruling targets specific event markets rather than the company's entire operation.

Ruling Could Influence Other States

The Washington decision could affect how other states approach prediction markets. Judge McHale's order establishes a distinction between contracts considered financial products and those that resemble gambling.

That distinction could become increasingly important as more states challenge Kalshi's operations. Several jurisdictions have already questioned whether sports and other event contracts fall under state gambling laws.

Kalshi continues to argue that federal derivatives law protects its markets from state interference. Washington's ruling nevertheless strengthens the position of states seeking to regulate prediction markets as gambling.

The decision also adds another layer to the broader dispute between Kalshi, state regulators and the Commodity Futures Trading Commission. As additional courts consider similar cases, their rulings could determine how prediction markets operate across the country.

For now, Washington has drawn a clear line around Kalshi's most controversial products. The company can remain active in the state, but it must remove most event-based wagering markets from Washington residents.

Jonathan Rodriguez
Jonathan Rodriguez

Jonathan is an avid basketball fan, and is often looking forward to the next upcoming NBA season when not checking players' stats during games. He also likes to keep his ears on the ground for the latest rumblings in the online casino industry.

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