Key facts
- Kalshi must stop offering prediction market contracts tied to sports, elections, politics, entertainment, culture, tech, science, and "mentions" in Washington state.
- Contracts involving commodities, climate, economics, and finance are exempt from the injunction.
- The judge found that the Commodity Exchange Act does not preempt Washington gambling law.
- Kalshi must implement initial geofencing by August 19.
- A GeoComply multi-source geofencing system must be in place by September 2.
- Kalshi accused Nevada's gaming regulator of violating federal law over alleged failure to comply with a geofencing order.
A Washington state judge has ordered prediction market platform Kalshi to cease offering a wide array of event contracts within the state. King County Superior Court Judge John McHale ruled that federal commodities law does not preempt Washington's gambling laws, rejecting Kalshi's primary defense. The injunction bars Kalshi from offering contracts related to sports, elections, politics, entertainment, culture, technology, and science, as well as "mentions." However, contracts concerning commodities, climate, economics, and finance are exempt from this order.
Washington Attorney General Nick Brown stated that Kalshi is being held accountable for operating an illegal gambling operation. To comply with the ruling, Kalshi is required to implement IP-address and residency-based geofencing by August 19. Furthermore, the platform must deploy a GeoComply multi-source geofencing system by September 2 to prevent individuals within Washington from accessing the prohibited contracts.
The amended order, issued Wednesday, formalizes preliminary injunction terms granted in July. The judge determined that the Commodity Exchange Act does not preempt state gambling regulations and that Washington had demonstrated a strong likelihood of success on its claims under three state laws. Kalshi has consistently argued that the Commodity Futures Trading Commission holds exclusive jurisdiction over its exchange. The Washington Court of Appeals has denied the company's request to stay the injunction.
Separately, Kalshi accused Nevada's gaming regulator of violating federal law after the state sought daily penalties of $120,000 for the firm's alleged failure to comply with a geofencing order. Kalshi stated it hired GeoComply, a vendor licensed by Nevada's gaming regulator, and that Nevada investigators misrepresented their residences to circumvent the company's blocking measures.