Washington Could Be Next State to Ban Kalshi After Latest Ruling

Washington state could follow Michigan and Nevada in banning Kalshi after a judge ruled against the prediction market platform. Judge John McHale granted the state a preliminary injunction against Kalshi in its lawsuit against the company.

In the ruling, Judge McHale said that Kalshi conducts illegal gambling activities in violation of Washington state gambling laws and that the Commodity Exchange Act (CEA) does not offer preemption.

Kalshi as a Betting Platform, Rules Judge

The judge did not entertain the idea that Kalshi is a financial trading exchange and clearly stated that it is an “online betting platform.”

“Kalshi operates an online betting platform that it advertises as a ‘prediction market’ and that allows consumers to bet on thousands of topics ranging from sports, political elections, entertainment, popular culture, and whether public figures will utter specific words or phrases (‘mentions’),” stated the ruling.

It added, “Kalshi transacts business in King County by offering, operating, conducting, marketing, promoting, and/or distributing unlicensed and illegal gambling activities.”

The ruling could see Kalshi forced out of Washington. Michigan became only the second state to prohibit Kalshi, following Nevada. The state extended the ban last week.

Timeline of Washington vs. Kalshi

• March 26: Washington Attorney General Nicholas W. Brown files lawsuit in King County Superior Court.
• March 27: Kalshi removes case to federal court.
• March 30: Robinhood sues Washington State Gambling Commission and Attorney General in federal court.
• May 5: Judge remands Kalshi case back to state court.
• May 8: Kalshi appeals to Circuit Court and files motion to stay.
• May 21: Ninth Circuit denies Kalshi motion to stay.
• July 20: Judge McHale issues a preliminary injunction against Kalshi.

Kalshi is likely to appeal Judge McHale’s ruling, but after the Ninth Circuit rejected its motion to stay, it may be forced into blocking access to Washington users while the appeal is pending.

Kalshi Caught Between States & CFTC

In Michigan, Kalshi followed the court’s orders and said it is working on geoblocking users. It also wound up trades as requested. However, the CFTC objected, arguing that Kalshi must honor the trades.

“A state cannot force a DCM to violate its obligations, and federal law does not permit a DCM to discriminate against a state’s residents,” said CFTC Chairman Michael Selig in a press release.

“Canceling trades that have already been executed is an unprecedented step that risks a cascading effect on the entire marketplace and undermines the certainty in contracting that is a necessary component of a functioning market. The Commission will not allow states or state courts to bully registered entities into violating the Commodity Exchange Act and CFTC regulations.”

Kalshi responded, saying it was being put in an impossible position because states and the CFTC both mandated conflicting actions.

We are disappointed by this decision and believe it is unfair to Kalshi. We already acted and unwound the trades, as the Michigan court order required us to do.

We are being put in an impossible position, looking to follow state court orders that may contradict our federal… https://t.co/M81qNaOzCY

— robertjdenault (@robertjdenault) July 14, 2026

The ruling in Washington could again force Kalshi to choose between complying with court orders and the CFTC’s demands. The ruling does not immediately force Kalshi to block access in Washington. The scope of the injunction will be determined following both parties’ submission by August 3.