Kalshi ordered to stop most operations in WA
Published in Business News
Kalshi, the online prediction market, must stop most operations in Washington by the middle of next week, a King County judge ordered Thursday, finding that the company is running a gambling operation that is illegal under state laws.
Attorney General Nick Brown had sued Kalshi in March, accusing the company of violating Washington’s relatively strict anti-gambling laws, and using the company’s own advertising — it had boasted that it allowed people to “bet on everything” — to prove the point.
“Kalshi operates an online betting platform,” King County Superior Court Judge John McHale wrote in his order Thursday, adding that the company likely is violating multiple provisions of state law.
McHale had previously ruled that the company likely violates Washington law, but had not said when it must cease operations or for how long.
“As other courts have recognized, Kalshi is a regulated, nationwide exchange for real-world events, and it is subject to exclusive federal jurisdiction,” Kalshi spokesperson Elisabeth Diana said in March, after Brown filed his lawsuit. “It’s very different from what state-regulated sportsbooks and casinos offer their customers. We are confident in our legal arguments.”
Kalshi has argued that it is a prediction market, overseen by the federal Commodity Futures Trading Commission. The CFTC, under President Donald Trump, has been friendly to the company and its largest competitor, Polymarket, suing at least nine states over their efforts to regulate the companies.
“We will see you in court,” CFTC Chair Mike Selig threatened last spring, warning states against trying to regulate the companies.
The Trump family stands to benefit from the rise of prediction markets. Donald Trump Jr. is a strategic adviser to both Kalshi and Polymarket, and his venture capital fund has invested in Polymarket before a planned launch in the U.S.
Kalshi did not immediately respond to a request for comment Thursday.
On Thursday, McHale said the company must stop accepting bets or contracts in Washington on anything related to sports, elections, politics, entertainment, culture, tech and science. It may continue accepting bets or contracts on things like economics, finance, climate and commodities, McHale said.
McHale ordered Kalshi to implement geofencing on its site to ensure that IP addresses within Washington cannot place bets or purchase contracts on the site. He ordered the company to have geofencing implemented by Aug. 19 and a more sophisticated geofencing in place by Sept. 2 or face a $120,000-a-day fine until it is complete. He also ordered the company to stop advertising and marketing in Washington.
“Kalshi has gotten rich promoting wagers on sports, elections, natural disasters, events related to the Iran War, and more,” Brown said in a statement. “As this case moves forward, we will continue to enforce Washington law and hold Kalshi accountable for misleading consumers.”
McHale said the company must continue to let Washington residents close their accounts and withdraw funds.
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