Washington Judge Blocks Kalshi Sports Prediction Markets as Illegal Gambling

A Washington state judge has granted a preliminary injunction against Kalshi, the prediction market platform, ruling that its sports event contracts constitute illegal gambling under state law. The court sided with the Washington State Gambling Commission, which argued that Kalshi's operations violate the state's ban on unlicensed gambling.

The ruling temporarily blocks Kalshi from offering sports prediction markets to Washington residents. The company had argued that its contracts were regulated by the Commodity Futures Trading Commission (CFTC) and thus preempted state law, but the judge found that the CFTC's oversight does not override Washington's anti-gambling statutes.

• The injunction prohibits Kalshi from accepting new bets or settling existing contracts on sports events in Washington.
• Kalshi must remove all references to Washington from its platform.
• A hearing for a permanent injunction is set within 30 days.

Kalshi has faced similar challenges in other states, but this is one of the first significant court rulings against the platform's state-level compliance. The company has emphasized that it is a CFTC-regulated exchange offering event contracts, not gambling.

The decision highlights the ongoing tension between federal commodity law and state gambling laws regarding prediction markets. Kalshi may appeal the ruling, potentially setting the stage for a broader legal battle over the classification of these contracts.