King County Judge Orders Kalshi to Stop Most Prediction-Market Bets in Washington

A King County Superior Court judge ordered Kalshi, the prediction-market platform now valued at roughly $22 billion, to stop offering most of its wagers to Washington residents by September 2. The final order, issued Wednesday by Judge John McHale, bars Kalshi from taking bets on sports, elections, politics, entertainment, culture, technology and science inside the state, and follows a preliminary injunction the same court granted in July after finding the company had likely violated Washington's gambling laws. Attorney General Nick Brown brought the case, arguing Kalshi built a national business on wagers the state has never legalized outside its tribal casinos. Kalshi disagrees and says the ruling oversteps state authority entirely. The fight over what to call a "prediction market" (a hedge, in the company's telling, or a sportsbook without a license, in the state's) is now playing out in courtrooms in at least 11 states, with Washington's outcome one of the most sweeping so far.

How a King County Judge Reached the September Deadline

The order traces back to a preliminary injunction the same court granted in July, when the judge found Washington consumers faced "substantial injury" from Kalshi's unregulated wagers and that the company was likely violating both the state's Gambling Act and its Consumer Protection Act. The Gambling Act's 2006 amendment specifically prohibits internet gambling, and the state's Attorney General's office argued Kalshi's contracts meet the legal definition of gambling: "staking or risking something of value upon the outcome of a contest of chance or a future contingent event." Kalshi tried to pause the ruling while it appealed, but the Washington Court of Appeals denied the company's request for a stay, leaving Wednesday's final order intact and the September 2 deadline in place.

What Washingtonians Can and Can't Bet On Now

The order does not shut Kalshi out of the state entirely. The AG's office described it as banning "a substantial part" of the company's business, not all of it. Contracts tied to commodities, climate and economic or financial indicators remain legal in Washington. Everything built around sports outcomes, election results, political events, entertainment, culture, technology or science is now off-limits, along with so-called "mention markets," where users bet on whether a politician or celebrity will say a specific word or phrase on camera. Kalshi has two hard dates to comply: an IP-address and residency-based geofence by August 19, and a more rigorous, multi-source geofencing system by September 2. Until then, the company is also barred from advertising directly to Washington consumers. "Kalshi has gotten rich promoting wagers on sports, elections, natural disasters, events related to the Iran War, and more," Brown said in the AG's release. "Under this order, Kalshi is banned from offering wagers on most of those topics in Washington."

Why Washington's Tribes Pushed for This Fight

The Washington Indian Gaming Association applauded the ruling, framing it as a defense of a legal structure that has existed for decades: in Washington, sports betting is legal only inside physical tribal casinos, under compacts that took years of negotiation and share revenue with tribal governments. Kalshi's national growth has alarmed tribal gaming interests well beyond this state — the Washington Post reported in April that prediction markets are challenging tribal casinos' "hard-won place" in the U.S. gambling industry, since federally regulated exchanges like Kalshi argue they answer only to the Commodity Futures Trading Commission and not to state gaming compacts. By August, tribal and commercial gaming groups told Congress that prediction markets built around sports outcomes had already cost states an estimated $1.2 billion in lost tax revenue by operating outside the licensing and taxation rules regulated sportsbooks follow. Senators who took up the issue wrote that the platforms pose "an existential threat to tribal sovereignty by undermining the revenue that tribes rely on for government services," according to Route Fifty's coverage of the growing tribal pushback nationally.

Kalshi's Federal Jurisdiction Defense

Kalshi spokesperson Jacki McGavick said the company "respectfully disagrees" with the ruling and is "considering all legal options." The company's core legal argument is jurisdictional: Kalshi contends its contracts are federally regulated futures products under exclusive Commodity Futures Trading Commission authority, which preempts state gambling law entirely — the same defense it has raised in nearly identical fights around the country. It is not a fringe argument. CFTC Chair Michael Selig has publicly promised the federal agency will sue states that try to restrict prediction markets it considers within its own jurisdiction, according to KUOW's reporting on the ruling. That sets up a direct standoff between a federal regulator sympathetic to the industry and state attorneys general who say the CFTC has no business overseeing what amounts to consumer sports betting.

There is a historical irony in that fight. States only gained the authority to write their own sports betting rules at all because of a 2018 U.S. Supreme Court decision, Murphy v. NCAA, which struck down the federal Professional and Amateur Sports Protection Act on Tenth Amendment grounds and told Congress that if it wanted sports gambling regulated nationally, it had to do that job itself rather than commandeering the states. That ruling is why Washington's gambling compacts with its tribes exist in their current form, and it is exactly the state authority Kalshi is now trying to route around by arguing the CFTC, not any legislature in Olympia, gets to decide what counts as a regulated futures contract instead of a bet.

A Pattern Playing Out in 11 States

Washington is now one of at least 11 states that have taken legal action to restrict or stop Kalshi, and the results have been inconsistent enough to guarantee more litigation. The CFTC has already intervened to block state-level restrictions on Kalshi in both Michigan and Minnesota, arguing federal law preempts those states' gambling rules — the opposite outcome from what just happened in King County. That split is exactly why this case is unlikely to end with Wednesday's order: with a federal regulator actively fighting some state rulings while leaving others like Washington's standing for now, the underlying jurisdictional question is almost certainly headed toward a higher court, whether that is the Ninth Circuit or eventually the U.S. Supreme Court.

What's at Stake for a $22 Billion Company

Kalshi's growth explains why it is fighting these battles state by state rather than simply exiting markets that push back. The company's monthly trading volume rose from $226 million in December 2024 to $6.6 billion by December 2025 and roughly $29 billion this past June, and it now accounts for more than 90% of U.S. prediction-market activity. It raised $1 billion at a $22 billion valuation earlier this year and has reportedly been in talks toward a $40 billion valuation ahead of a planned IPO. For a company preparing to go public on the strength of that growth, a state carving sports, elections and entertainment out of its Washington offering is a real dent, but a far smaller one than losing the federal jurisdiction argument nationally would be, which is why Kalshi is contesting even a single state's order this aggressively rather than treating Washington as a rounding error. If the CFTC's promised lawsuits against other states succeed while Washington's order stands, the company will be left defending its federal-preemption theory in front of whichever appellate court eventually takes the question up, with a $22 billion valuation and a pending IPO riding on the answer.