Washington Judge Blocks Kalshi's Event Contracts Citing Consumer Harm

Kalshi has been ordered to at least temporarily stop offering event contracts in Washington state. The judge cited potential consumer harm from what he described as illegal gambling activities. Kalshi is facing similar pushback in other states, including Michigan, Massachusetts, New York, Nevada, and elsewhere.

On July 8, New York issued a similar order, denying Kalshi’s request for preliminary injunction against a decision to block event contracts in the Empire State. The decision was reached on Monday, July 20, when Judge John McHale of the King County Superior Court sided with Washington in the state’s request to limit the company’s ability to offer the contested form of trades.

Kalshi and other prediction markets maintain that what they offer is not tantamount to gambling, as it is regulated under the Commodity Futures Trading Commission (CFTC). Judge Hale argued in a 14-page decision that the Commodity Exhange Act does not preempt Washington State's gambling laws. Tensions have risen also over the exploitation of such platforms by insiders who have been placing trades on events that they had non-public information on. A long-time President Donald Trump teleprompter operator is reportedly settling a case against him, after it transpired that he had been betting on POTUS' speeches.