Washington Court Mandates Kalshi Halt Wide Array of Prediction Market Offerings
The platform faces an Aug. 19 deadline for preliminary geofencing measures and must deploy GeoComply's multi-source system by Sept. 2.
In Washington state, a judge has directed the prediction market platform Kalshi to cease providing an extensive array of event contracts throughout the jurisdiction, dismissing the company's contention that federal commodities regulations override state gambling legislation.
Judge John McHale of King County Superior Court prohibited Kalshi from making available contracts related to sports competitions, electoral contests, political events, entertainment industries, cultural happenings, technology developments, scientific discoveries, and various "mentions." The restrictions notably exclude contracts concerning commodities markets, climate-related events, economic indicators, and financial instruments.
"We're holding Kalshi accountable for running an illegal gambling operation,"
Washington Attorney General Nick Brown said Thursday on X, citing a recent court ruling.
The company faces a requirement to establish geofencing systems utilizing IP-address verification and residency-based screening by Aug. 19, followed by implementation of a more comprehensive GeoComply multi-source geofencing platform by Sept. 2 to block Washington residents from accessing contracts subject to the court's injunction.
Judge McHale signed the revised order on Wednesday, establishing the specific conditions of a preliminary injunction he had authorized in July. His determination concluded that the Commodity Exchange Act does not supersede Washington's gambling statutes and that the state had demonstrated a reasonable probability of prevailing on allegations under three separate state legislative provisions.
The platform continues to assert that the Commodity Futures Trading Commission possesses sole regulatory authority over its exchange operations. Kalshi's petition to the Washington Court of Appeals seeking a suspension of the injunction was rejected.