Washington Judge Orders Preliminary Injunction Against Kalshi Prediction Market

A Washington state judge has granted a preliminary injunction against Kalshi, signaling the court's view that the federally regulated prediction-market operator is likely violating Washington's gambling and consumer protection laws. The decision escalates a broader legal fight over whether CFTC-supervised prediction markets are governed exclusively by federal law or can still be policed under state gambling rules. Washington Attorney General Nick Brown said King County Superior Court found the state is likely to prevail in its case. According to the Attorney General's Office, the court concluded Kalshi likely breached Washington's Gambling Act and Consumer Protection Act by operating an illegal online gambling business in the state. A final injunction order is expected on August 5, after additional briefing on remedies. State officials argue Kalshi's platform enables wagers on a wide range of outcomes, including sports, elections, public hearings, disease outbreaks and other future events. The complaint also points to Kalshi advertising that users can "bet on anything", and alleges the company promoted online sports betting in Washington despite state restrictions. Washington further contends Kalshi's model meets the state's definition of illegal gambling because users stake money on contingent future events for potential payouts, while Kalshi collects fees on those transactions. Kalshi said it disagrees with the ruling and will appeal. Spokesperson Jacki McGavick argued that states do not have jurisdiction over federally supervised prediction markets, citing prior court decisions, including the Third Circuit. Kalshi has long maintained its event contracts are regulated under the Commodity Exchange Act and fall within the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC), not state gambling regulators. At this preliminary stage, the Washington court found the Commodity Exchange Act does not preempt Washington's gambling laws, allowing the state's case to move forward. The dispute has implications beyond Washington. Multiple states have challenged Kalshi's event contracts, especially sports-related markets, as the company expands offerings tied to real-world outcomes. The appeal's outcome could influence how prediction markets are overseen across the U.S. as the sector grows across sports, politics and other event-driven contracts.