A Washington court order calls for Kalshi to block contracts tied to sports, elections, politics, entertainment, culture, technology, science and mentions, with GeoComply geofencing required by Sept. 2
Kalshi must halt most of its event contract operations in Washington under a sweeping preliminary injunction that extends well beyond the sports contracts targeted by most other states.
An order signed Wednesday finalizing the injunction’s terms bars Kalshi from offering or facilitating Washington trades involving sports, elections, politics, entertainment, culture, technology and science, and mention markets. Contracts involving commodities, climate, economics and finance may remain available.
“They were allowing bets on pretty much every aspect of American life,” Washington Attorney General Nick Brown said in a video posted to X on Thursday, citing markets involving sports, natural disasters and measles cases.
“We sued, and we won,” Brown said. He later acknowledged that the preliminary injunction does not resolve the underlying lawsuit: “This case isn’t over. There’s still a long way to go, but this is a great early win for us.”
Kalshi must implement GeoComply geofencing
The order phases in the restrictions over the next three weeks. By Aug. 19, Kalshi must use IP addresses and customer residency information to prevent people in Washington from opening positions in prohibited contracts, including through third-party intermediaries carrying its markets.
By Sept. 2, Kalshi must deploy multi-source geolocation technology provided by GeoComply. If the system is not operational by then, Kalshi could face penalties of $120,000 per day. The company can instead submit an affidavit describing its implementation efforts, leaving the court to determine whether it exercised sufficient diligence and whether penalties are warranted.
Kalshi must also stop advertising the prohibited contracts specifically to Washington consumers and make good-faith efforts to exclude the state from nationwide campaigns when technologically feasible.
Washington users can still exit existing positions and withdraw their funds. Kalshi must also preserve records connected to those customers while the litigation continues.
Kalshi continues to dispute Washington’s authority
Brown sued Kalshi on March 27 after the Washington State Gambling Commission declared in December that event contract markets were not authorized in the state. The complaint alleges violations of Washington’s Gambling Act and Consumer Protection Act.
Kalshi immediately removed the case to federal court, arguing that the Commodity Exchange Act gives the CFTC exclusive jurisdiction over its federally regulated exchange. A federal judge returned the case to state court in May, and the Ninth Circuit denied Kalshi’s request to pause the proceedings during its appeal.
King County Superior Court Judge John McHale granted Washington’s request for a preliminary injunction in July, finding that the state was likely to prove its claims and that continued operations could substantially harm consumers. He then directed the parties to propose the language and scope of the restrictions.
“States don’t have jurisdiction to regulate prediction markets,” Kalshi said after that ruling, according to Reuters, pointing to federal decisions supporting CFTC exclusivity. Kalshi appealed the injunction, but must now implement geofencing while continuing to challenge the state’s authority and the breadth of the restrictions.
Washington order goes further than other state blocks
Washington’s injunction appears to be the broadest court-ordered restriction on Kalshi’s product range to date. Before the Washington order, Michigan and Nevada were the only states to implement active court-ordered restrictions, while a Massachusetts injunction remained paused during Kalshi’s appeal.
The Michigan restriction applies only to sports contracts. Nevada’s order blocks sports, election and entertainment contracts. Washington reaches those subjects and adds politics, culture, technology and science, plus mention markets, leaving only a handful of expressly permitted categories.
The action could also have implications beyond Kalshi. The Gambling Commission’s December notice applied broadly to event contract markets, although Washington has not filed a comparable enforcement case against another platform.
Robinhood filed a preemptive federal lawsuit against Brown and the commission on March 30, three days after Washington sued Kalshi. Robinhood argued that the state’s actions created an imminent threat to its event-contract business, which distributes markets from Kalshi and ForecastEx.
Crypto.com-owned Nadex followed on July 22, two days after McHale granted the preliminary injunction. Crypto.com’s OG platform similarly argued that Washington’s action against Kalshi demonstrated a “concrete and imminent threat” that the state would pursue other federally regulated platforms.
For now, Kalshi remains Washington’s only direct prediction-market enforcement target. But the breadth of the injunction gives the state a potential roadmap for pursuing significantly more than sports contracts on competing platforms if the order survives appeal.
