Kalshi Cuts Off Sports Event Contracts in Washington State After Court Order
Kalshi began blocking Washington state residents from trading sports, election, entertainment, and cultural event contracts this week, after a King County Superior Court judge issued a preliminary injunction against the prediction market platform. The restrictions, which took effect August 20, leave Kalshi operating in the state only for its non-sports financial and economic contracts.
How the case got here
Washington Attorney General Nick Brown sued Kalshi in March, arguing that its sports-related event contracts amount to illegal gambling under state law. Washington permits sports betting only on tribal land through gaming compacts, with no legal path for online sportsbooks or prediction markets. On August 13, the court sided with the state, finding a "likelihood" that Kalshi's sports contracts violated Washington gambling law and rejecting the company's argument that federal commodities regulation preempts state authority over the product.
The order set a compliance timeline: an initial IP- and residency-based geofence by August 19, followed by a more robust multi-source geofencing system using GeoComply due by September 2. Missing that second deadline reportedly carries fines of up to $120,000 per day.
Washington becomes the third state to act
Washington now joins Michigan and Nevada among states that have moved to restrict Kalshi's sports-related contracts, deepening a broader standoff between prediction market operators and state gambling regulators. Kalshi and other platforms maintain that because their contracts are regulated as derivatives by the federal Commodity Futures Trading Commission, state gambling law shouldn't apply to them — a position several state courts have so far declined to accept at the preliminary-injunction stage.
Why it matters for bettors
Prediction markets like Kalshi have positioned themselves as an alternative to traditional sportsbooks in states where mobile sports betting isn't legal, including states like California and Texas. Washington's action is a reminder that this workaround remains legally unsettled and state-by-state: access to sports-related event contracts can change abruptly based on ongoing litigation, and residents of restricted states lose that access with little advance notice. Traditional licensed sportsbooks, by contrast, operate under long-established state regulatory frameworks that don't carry the same open legal question.