Washington sues Kalshi over gambling law violations
Table of contents
- Washington AG Nick Brown filed a civil lawsuit against Kalshi on 27 March, alleging its event-based contracts constitute illegal online gambling under state law.
- The filing is the latest in more than 20 state-level actions against prediction market platforms, following Arizona’s first criminal charges filed on 17 March.
- A bipartisan Senate bill introduced the same week would bar CFTC-regulated platforms from listing sports betting contracts nationally.
Washington state has become the latest to file a civil lawsuit against prediction market platform Kalshi, deepening a national legal campaign against the New York-based company.
Attorney General Nick Brown filed the complaint on 27 March in King County Superior Court, alleging Kalshi violated Washington’s Gambling Act, Consumer Protection Act, and Recovery of Money Lost at Gambling Act.
The state argues Kalshi’s platform meets Washington’s statutory definition of gambling: staking or risking something of value upon the outcome of a contest of chance or a future contingent event.
Each Kalshi bet risks money, depends partly on chance, and promises a payout to winners, the AG’s office said. The complaint seeks to block Kalshi’s operations in the state, recover money lost by residents, and impose civil penalties.
Washington has banned online gambling since 2006 and maintains one of the most restrictive gambling frameworks in the United States.
Brown drew attention to a Kalshi advertisement in which a user tells a friend they found a way to bet on the NFL even though they live in Washington, which the state cited as evidence the company knowingly circumvented local law.
A widening crackdown
The Washington lawsuit is part of a coordinated wave of state enforcement. According to the National Conference of State Legislatures, more than 20 lawsuits and cease-and-desist actions were pending across the country as of March 2026.
Nevada secured a temporary restraining order against Kalshi the previous week, and a judge granted a preliminary injunction against Coinbase, Kalshi’s platform partner, requiring it to pause prediction market offerings in that state.
On 17 March, Arizona became the first US state to file criminal charges against Kalshi, with Attorney General Kris Mayes alleging the company operated an unlicensed illegal gambling business.
Courts in New Jersey and Tennessee have sided with Kalshi by temporarily blocking state enforcement. Courts in Massachusetts and Ohio have gone the other way, backing state regulators. The split rulings mean the central legal question, which revolves around federal CFTC oversight versus state gambling authority, remains unresolved.
The complaint also targets Kalshi’s marketing approach. The AG’s office alleged the company used college student influencers to promote the platform and briefly attempted to recruit a 15-year-old influencer.
Brown said Kalshi had turned every event and every tragedy into a betting opportunity, accusing the company of promoting addictive behaviour among young adults. Kalshi’s platform extends well beyond sports.
Users can wager on measles case counts, congressional testimony outcomes, whether a foreign leader will be removed from power, and which specific words a television host will say during a broadcast. The breadth of these markets sits at the centre of regulators’ argument that the platform functions as an unregulated bookmaker rather than a legitimate financial exchange.
Federal preemption defence
Kalshi moved immediately to transfer the case to federal court, arguing the issues are already being litigated in other federal venues and that Washington offered no warning before filing.
The company has consistently maintained that, as a federally licensed designated contract market regulated by the Commodity Futures Trading Commission (CFTC), its contracts are financial derivatives rather than gambling products, and that federal oversight supersedes state law. The Trump administration and senior CFTC leadership have both backed that position.
Congress is also moving on the issue. A bipartisan Senate bill introduced on 23 March by Senators Adam Schiff and John Curtis would prohibit CFTC-regulated platforms from listing sports betting and casino-style contracts. Together with escalating state enforcement, the bill signals that pressure on prediction markets is converging from multiple places.
Keep reading
Do you have a story worth sharing?
Send it over to our editors!
