Kalshi ordered to restrict event contracts in Washington state

A King County Superior Court judge has found that Kalshi is likely violating Washington gambling laws and ordered the platform to block most of its event contracts in the state. For high-risk payments and platform operators, the practical point is simple: if a product is treated as gambling at the state level, the payment flow, acquisition, and marketing stack can all get hit at once.

1. Judge John McHale ordered Kalshi to stop accepting contracts in Washington on sports, elections and politics, entertainment, culture, technology and science. He said the platform was likely operating in violation of state gambling laws.
2. Under the preliminary injunction, Kalshi must put in an initial geofencing system by August 19 and a more advanced system by September 2 to keep Washington residents away from the restricted contracts. If it does not comply, the court warned of fines of $120,000 per day.
3. McHale also barred Kalshi from advertising or marketing the restricted products to Washington consumers. The company must still let users close their accounts and withdraw their funds, which is the bit PSPs and banks tend to care about when a product gets restricted but not fully shut down.
4. The judge described Kalshi as an “online betting platform” and cited concerns over gambling addiction. He also found that Kalshi had “wilfully ignored” guidance from the Washington State Gambling Commission saying event-based contracts were not authorised in the state.
5. Kalshi has appealed the injunction and said it is considering legal action. “The CFTC has exclusive jurisdiction over our exchange,” Kalshi spokesperson Jacki McGavick said. Washington Attorney General Nick Brown, who sued Kalshi in March, is seeking to recover money lost by Washington bettors and impose civil penalties.