Washington Judge Grants Preliminary Injunction Against Kalshi

• State of Washington King County Superior Court judge grants preliminary injunction against Kalshi
• Judge John McHale noted the state has shown “a likelihood that Kalshi’s conduct violates” portions of the Washington Gambling Act
• Washington Attorney General Nick Brown filed a lawsuit against Kalshi in March

The State of Washington this week secured a preliminary injunction against prediction market operator Kalshi, after Washington Attorney General Nick Brown filed a lawsuit against Kalshi this past March.

State of Washington King County Superior Court Judge John McHale declared the state has shown a “likelihood of success on the merits” of its claims that portions of Kalshi’s event contract offerings, including sports event contracts, violates aspects of the Washington Gambling Act. When issued, the preliminary injunction will temporarily bar Kalshi from offering its sports event contracts in Washington.

Details of the preliminary injunction will be released on Wednesday, Aug. 5.

Sports Event Contracts Temporarily Blocked

According to the Washington State Office of the Attorney General, the definition of gambling under Washington law is “staking or risking something of value upon the outcome of a contest of chance or a future contingent event.”

Judge McHale noted in his ruling that the state has shown a likelihood that Kalshi violates multiple provisions of the Washington Gambling Act. This includes operating, managing, and profiting from illegal gambling activities in the state, engaging and continuing to engage in professional gambling in violation of the act, engaging in online gambling activities in violation of the law, and offering gambling on its platform in violation of the act.

“This victory is the first step toward holding Kalshi accountable for their brazen violations of Washington law,” Attorney General Brown said in a released statement. “Kalshi padded their pockets as they promoted illegal betting on sports, elections, the total number of measles cases this year, what will witnesses say during a child trafficking hearing, and even natural disasters.”

The court will issue the final preliminary injunction order on Aug. 5 after considering specific terms from both Kalshi and the Washington Attorney General’s Office. Kalshi will temporarily be blocked from offering its sports event contracts in the state.

A Kalshi spokesperson reiterated to Sports Betting Dime that state governments do not have the power to regulate prediction markets.

“States don’t have jurisdiction to regulate prediction markets. Many courts – including the Third Circuit – have made this clear. We’re disappointed to see Washington State continue wasting taxpayer dollars.”

Lawsuit Alleges Kalshi Violates State Gambling Laws

Attorney General Brown previously filed the lawsuit in the State of Washington King County Superior Court, alleging Kalshi is in direct violation of the state’s prohibition of online gambling. While online sports betting is allowed in Washington, it is only allowed on tribal casino property and strictly prohibited off tribal land.

Brown notes in the lawsuit that Kalshi’s gambling operations “violate numerous provisions of Washington’s Gambling Act, as well as the Consumer Protection Act and the Recovery of Money Lost at Gambling Act.”

“In direct violation of this prohibition and public policy, Kalshi operates its online betting market nationwide, including in Washington and other states that prohibit online gambling. In its advertising and marketing, Kalshi specifically promotes illegal online sports gambling in Washington state,” Brown reported in the lawsuit.

Additionally, Brown said Kalshi has marketed itself to young people between the ages of 18 and 21, coaxing college students to their platform by routinely paying influencers to promote their gambling app to their peers.

The lawsuit seeks a permanent injunction from Kalshi’s alleged unlawful conduct in the state, restitution for consumers of money or property unlawfully acquired by Kalshi, and the court assess civil penalties for every violation of the Consumer Protection Act.