Washington Judge Orders Kalshi to Block Sports, Election and Other Markets

SEATTLE – A King County judge has ordered Kalshi to block Washington users from most of its event-contract markets under a preliminary injunction.

Sports, election, politics, entertainment, culture, tech and science, and “mention” markets are covered by the order. Kalshi can continue offering contracts involving commodities, climate, economics and finance in the state.

King County Superior Court Judge John McHale signed the amended preliminary injunction order on Aug. 12. It requires Kalshi to introduce IP address and residency-based geofencing by Aug. 19, followed by a multi-source GeoComply system by Sept. 2.

Kalshi Faces September Geofencing Deadline

The GeoComply system must prevent anyone physically located in Washington from purchasing contracts prohibited by the injunction. Kalshi can still allow users to exit positions they already hold, and Washington residents can close accounts and withdraw their funds.

If the GeoComply system is not operational by Sept. 2, Kalshi must either pay Washington $120,000 for each subsequent day until implementation is complete or submit a sworn explanation for the delay. If the company chooses the latter route, McHale could impose penalties after determining whether Kalshi acted with sufficient diligence.

The injunction also prohibits Kalshi from marketing or advertising the restricted contracts to Washington consumers. McHale found that the company’s provision and promotion of what the court characterized as illegal gambling were likely unfair or deceptive practices under the state Consumer Protection Act.

The order cited advertising telling consumers they had “found a way to bet on the NFL even though we live in Washington”. The court found that claims presenting Kalshi’s betting products as legal in Washington were likely to mislead a reasonable consumer about their status under state law.

Order Sets Terms of July Preliminary Injunction

The latest order establishes the operating terms of the preliminary injunction Washington won in July. McHale previously found that the state had shown a likelihood of succeeding on claims that Kalshi violated the Washington Gambling Act and Consumer Protection Act.

The judge also concluded that Washington had demonstrated a likelihood of substantial consumer injury if the activity continued. Those findings remain preliminary, and the Aug. 12 order is not a final judgment determining liability in the underlying lawsuit.

Kalshi disputes Washington’s interpretation and maintains that its exchange falls under the exclusive jurisdiction of the Commodity Futures Trading Commission. “We respectfully disagree with the court’s decision and are considering all legal options”, spokesperson Jacki McGavick said following the order.

Kalshi sought to pause the injunction while it challenges the ruling, but the Washington Court of Appeals denied its request for a stay. The company can continue pursuing its challenge while complying with the current restrictions.

Federal and State Positions Remain Divided

Washington sued Kalshi in March, accusing the company of operating unlicensed online gambling while describing its offerings as federally regulated financial contracts. The state is also seeking to recover money lost by Washington consumers and obtain civil penalties as the case continues.

The ruling comes as federal and state authorities continue to disagree over who can regulate prediction markets. The CFTC asserted its federal authority over Kalshi this week in a separate New York dispute, arguing that designated contract markets should not face a patchwork of state gambling regulation.

Washington’s injunction remains in effect despite that broader jurisdictional fight. The immediate deadlines are Aug. 19 for Kalshi’s initial geofencing measures and Sept. 2 for the full GeoComply system, while the state lawsuit and Kalshi’s appeal continue.

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