Washington judge blocks Kalshi sports event contracts

A Washington state judge has ordered the prediction market platform Kalshi to cease offering its sports-related event contracts to state residents, ruling that the platform likely violates state gambling laws. The preliminary injunction, granted by King County Superior Court Judge John McHale on July 20, marks a significant legal setback for the federally regulated company as it battles state authorities across the country.

Judge McHale found that the state demonstrated a likelihood of substantial injury to Washington consumers from what it considers illegal gambling activities. In his order, he wrote that the public interest and potential harm to consumers outweigh the harm to Kalshi from the injunction. The judge explicitly rejected Kalshi's argument that federal law preempts state regulation, stating that the Commodity Exchange Act does not prevent Washington from applying its gambling laws to the company's activities.

The injunction will not take effect immediately. The court has directed both parties to submit additional materials by August 3 and to confer on a plan for implementing the order. The restriction is scheduled to begin no earlier than August 5. Washington...