A Washington state judge has ordered prediction market platform Kalshi to stop offering event contracts tied to sports, elections, politics, entertainment, culture, tech, science, and “mentions” within the state, rejecting the platform’s argument that federal commodities law overrides state gambling regulations.
King County Superior Court Judge John McHale signed the amended order on August 15, finding that the Commodity Exchange Act does not preempt Washington gambling law. The judge determined the state demonstrated a likelihood of success on claims under three state laws, according to the ruling.
Kalshi must implement IP-address and residency-based geofencing by August 19 to block Washington residents from accessing the banned contracts. The platform faces a September 2 deadline to deploy GeoComply, a multi-source geofencing system, for full compliance.
“We’re holding Kalshi accountable for running an illegal gambling operation,” Washington Attorney General Nick Brown said in a statement.
The injunction stems from a legal clash over regulatory jurisdiction. Kalshi maintains the Commodity Futures Trading Commission holds exclusive authority over its exchange as a federally registered derivatives platform. The company has argued that federal commodities law preempts state gambling statutes. Judge McHale rejected this position, finding state law applies to the contracts in dispute.
The Washington Court of Appeals previously denied Kalshi’s request to stay the injunction, clearing the path for enforcement.
Contracts involving commodities, climate, economics, and finance remain exempt from the ban in Washington. Kalshi did not immediately respond to requests for comment on its compliance plans or potential next steps.
