Key facts
- Bright's lawsuit says he transferred $315,353.94 to Kalshi in 253 debits between June 17 and August 14, 2026.
- The suit says Kalshi retained $84,062.71 in trading fees, equal to 26.7 percent of his deposits.
- Bright's net loss was $308,781.62 and his account balance was $983.27, per the lawsuit.
- Kalshi argued in its October 30 motion that Bright lost money on event contracts regulated under federal law, not gambling.
- Bright alleges a Kalshi trading affiliate took the opposite side of a substantial portion of his positions.
Scott Bright, a Bellevue, Washington, resident, sued prediction market KalshiEX LLC and its parent Kalshi Inc. in King County Superior Court on October 23, 2026, seeking to recover money he lost making sports wagers on the platform. His lawsuit says the wagering occurred when online gambling was unlawful in Washington and after the state attorney general had already sued Kalshi on the same grounds.
Between June 17 and August 14, 2026, Bright transferred $315,353.94 to Kalshi in 253 separate debits from his checking account, according to the lawsuit. Kalshi allegedly collected $5,589.05 in funding fees on those transfers. The suit says the platform cycled his deposits through $14,396,457.30 in transactions and retained $84,062.71 in trading fees, equal to 26.7 percent of everything he deposited.
After his bets, Bright's net loss was $308,781.62 and his account balance was $983.27, the lawsuit says. He is asking for $580,544.98, calculated event by event under a 1950 Washington Supreme Court ruling that bars offsetting winnings in separate events against losses. If the court declines that figure, the suit asks for all funds he transferred plus $89,651.76 in funding and trading fees, over $405,000.
Kalshi filed a motion on October 30, 2026, to dismiss the case and to move it to US District Court for the Western District of Washington. The company argued that Bright lost money on event contracts, not gambling, and that such contracts fall under the Commodity Exchange Act and the oversight of the Commodity Futures Trading Commission. Kalshi also said Bright's losses went to counterparties rather than to Kalshi, and that his positions were matched with counterparties and resolved according to the outcomes of the underlying events.
Bright's lawsuit alleges that a Kalshi trading affiliate took the opposite side of a substantial portion of his positions, which he says would make Kalshi a dealer or player rather than a neutral venue. Kalshi's rulebook says the affiliate provides liquidity by placing orders on either or both sides of a market, and the company says the affiliate has access only to the same public information as other traders. The lawsuit says Bright does not know whether the affiliate was on the other side of any of his bets.
Kalshi separately asked the district court to stay the proceedings until the US Supreme Court decides whether to take up a case on whether state gambling laws apply to prediction markets. The US Court of Appeals for the Ninth Circuit ruled in August that Nevada can regulate Kalshi under gambling laws, and Bright's lawsuit quoted the ruling's finding that placing sports bets, even when called by another name, is still gambling. New Jersey has asked the Supreme Court to settle the question.