Securities Regulation Daily Wrap Up, EXCHANGES AND MARKET REGULATION—Wash. Super.: Kalshi ordered to stop offering most prediction market trading in Washington state, (Aug 14, 2026)
The court said Kalshi “continues to offer illegal gambling, sports wagering, and bookmaking” despite a July order.
The Kalshi exchange has been ordered by a Washington state court to stop offering most event contract trading in the state. The court found that Kalshi likely violated the Washington Gambling Act and the Consumer Protection Act by running an illegal gambling operation in the state (State of Washington v. KalshiEX, LLC, No. 26-2-10264-3 SEA (Wash. Super. Aug. 12, 2026)).
“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,” said Washington Attorney General Nick Brown.
The order also requires Kalshi to exclude Washington residents via geofencing and stop advertising in the state.
Event contracts and gambling. According to the court, Kalshi offers an online betting platform and mobile app in Washington state that allows consumers to bet on thousands of topics ranging from sports, political elections, entertainment, popular culture, and whether public figures will utter specific words or phrases (“mentions”).
The Washington Gambling Commission issued a notice in December 2025 that “[o]ffering events-based contracts or participating in these markets is not authorized in Washington State.”
In July, the court issued an order as part of a preliminary injunction, finding that Kalshi was likely violating Washington State gambling laws and that “substantial injury to Washington consumers” was likely to occur without an injunction.
In the July order, the court described Kalshi’s event contracts as gambling.
“On Kalshi, consumers place bets on the outcome of various issues by purchasing a “yes” or “no” bet. If the consumer wagers correctly, they receive a payout. If the consumer wagers incorrectly, they forfeit the money they wagered. Kalshi earns a transaction fee on each bet placed. Each bet risks money, relies in part on chance, and promises a payout to winners,” the court wrote.
The court said that Kalshi solicits bets from Washington consumers on its platform. “For example, Kalshi specifically solicited online gambling bets from Washington consumers by advertising that they could ‘bet on the NFL even though [they] live in Washington.”
The court further found that Kalshi’s event contracts affect the public interest and the Commodity Exchange Act (CEA) does not preempt Washington state gambling law.
Court order. In the August 12 order, the court reiterated its findings and laid out specific terms of the injunction.
The court ordered Kalshi to cease offering and advertising wagers on sports, elections, politics, entertainment, culture, tech and science, or mentions in Washington state. This is a substantial part of Kalshi’s business, which in recent years has been increasingly driven by sports wagers, the attorney general’s office said.
The court did not prohibit Kalshi from offering bets on commodities, climate, economics, or finance.
The court also ordered Kalshi to implement geofencing by August 19 to exclude Washington state residents from its platform. The court directed Kalshi to use the GeoComply geofencing solution used by Michigan and Nevada.
If Kalshi fails to implement geofencing by September 2, it may be subject to penalties of up to $120,000 per day.
Finally, the court ordered Kalshi to preserve records and preserve the status quo for funds received from Washington consumers through transaction fees.
The case is No. 26-2-10264-3 SEA.
Judge: McHale, J.
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