Kalshi Likely Violated Washington State Gambling Laws, Judge Rules — Update

By Elias Schisgall

Kalshi's online prediction-markets platform is likely violating state gambling laws in Washington, a state judge ruled Monday, granting the state attorney general's request for a preliminary injunction against the company.

The judge, John McHale, said he would issue an order laying out terms of the injunction against Kalshi by Aug. 5., allowing time for the company to engage with state officials over the injunction's language and scope.

"The state has shown a likelihood that Kalshi's conduct violates multiple provisions of the Washington Gambling Act," McHale wrote. "Based on the declarations and exhibits presented, the state has demonstrated a well-grounded fear of immediate invasion of consumers' legal rights."

The ruling in Washington court is the latest example of states looking to crack down on prediction markets run by Kalshi and its main rival Polymarket, as well as a handful of smaller platforms. (Polymarket has a data partnership with Dow Jones, the publisher of The Wall Street Journal.)

Those states have run into fierce opposition from the Commodity Futures Trading Commission, whose chair, Michael Selig, has embraced the platforms and insisted his agency has exclusive authority to regulate them. The CFTC has filed lawsuits against New York, Arizona, Illinois and Connecticut over their efforts to apply state gambling laws to prediction markets.

In his ruling, McHale argued that the CFTC's authority doesn't preempt state gambling laws in Washington. "Certain types of contracts and transactions may be allowed in some states and not in others," he wrote.

A Kalshi spokesperson on Tuesday said the company's operations fall outside the state's purview.

"States don't have jurisdiction to regulate prediction markets. Many courts--including the Third Circuit--have made this clear," the spokesperson wrote. "We're disappointed to see Washington State continue wasting taxpayer dollars."

Write to Elias Schisgall at elias.schisgall@wsj.com

(END) Dow Jones Newswires

July 21, 2026 13:13 ET (17:13 GMT)