Washington Judge Orders Kalshi to Block Sports and Election Bets

A Washington state court has ordered prediction market platform Kalshi to stop accepting bets on sports, elections and several other event categories inside the state. The ruling shows just how far apart a federal regulator and an individual state can land on the same business.

What exactly did the court ban?

King County Superior Court Judge John McHale barred Kalshi from offering contracts tied to sports, elections, politics, entertainment, culture, tech and science, plus so-called "mentions," meaning bets on whether a public figure will say specific words. Contracts tied to commodities, climate, economics and finance were left untouched.

Under the order, Kalshi must have basic IP-and-residency geofencing running by August 19. A fuller GeoComply system that checks location through multiple data sources has to be in place by September 2. The court also barred the company from advertising the banned contracts to Washington residents.

Prosecutors singled out the company's marketing too. The complaint cites a Kalshi promotional tweet in which a character texts a friend to say they had "found a way to bet on the NFL even though we live in Washington." The attorney general's office argues that example shows the company knew it was working around state law, and it labeled the marketing an "unfair and/or deceptive" practice.

What is Kalshi, and why did this fight start?

Kalshi lets users trade contracts tied to the outcome of real-world events: who wins an election, which team wins a game, whether something happens by a set date. The company and platforms like it call these financial derivatives. Critics call them gambling in a different wrapper.

That disagreement is the whole conflict in miniature. The Commodity Futures Trading Commission, or CFTC, regulates derivatives at the federal level and argues its authority is exclusive. Washington sees it differently: every Kalshi bet is a wager on a random outcome, so it falls under the state's gambling law.

The scale of this market shows in the numbers: back in the spring, Kalshi raised more than $1 billion at a $22 billion valuation. Legal fights with individual states clearly have not slowed that growth so far.

Why are the CFTC and Washington on opposite sides?

The court order landed just two days after the CFTC used emergency powers to order Kalshi to keep operating under the Commodity Exchange Act. The CFTC acted on Kalshi's own notice of a market emergency, filed after New York sued the company over alleged illegal gambling.

The regulator and the company argue that event contracts are interstate financial derivatives that state gambling law cannot reach. Washington disagrees and has the court on its side so far. President Donald Trump has publicly backed the CFTC and criticized state officials trying to shut prediction markets down.

How will the ban work in practice?

Kalshi has two deadlines to meet. The court also barred the company from advertising any of the banned contract categories to state residents.

• The core rule: by August 19, Kalshi must have basic IP-and-residency geofencing live for Washington users.
• By September 2, the company has to roll out the fuller GeoComply system, which checks location across several data sources at once.
• The ban covers sports, elections, politics, entertainment, culture, tech and science, and the "mentions" category.
• Contracts on commodities, climate, economics and finance were not affected.

"We're holding Kalshi accountable for running an illegal gambling operation."

- Nick Brown, Washington State Attorney General, statement on X, August 13, 2026

Brown also said Kalshi had "gotten rich promoting wagers on sports, elections, natural disasters" and events tied to the Iran war, adding that his office would keep holding the exchange to account.

Does this fight touch other states too?

Washington is far from the only front. The CFTC is currently suing nine states that have passed their own restrictions on prediction markets, starting with Illinois, Arizona and Connecticut and continuing through Wisconsin and Minnesota. The agency sued Minnesota within hours of that state's ban taking effect, which says a lot about how aggressively the federal regulator is defending its position.

Washington's own ban did not appear out of nowhere either. A judge issued a preliminary version back in July, finding that state consumers faced "substantial injury" without one. The Court of Appeals refused Kalshi's request to stay that ruling, so Thursday's order mostly formalizes terms that were already in place.

What does this mean for Kalshi?

So far, Kalshi's court record is mixed at best: in disputes with individual states, the company has lost more often than it has won. The CFTC's earlier order letting Kalshi keep operating does not guarantee an outcome in state courts, and the coming months should show whether Kalshi can make its claim to federal preemption stick.