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A Washington state judge has granted a preliminary injunction blocking Kalshi from offering sports-related prediction markets to Washington residents, adding another legal setback for the federally regulated platform.
King County Superior Court Judge John McHale granted the state’s request on July 20 after finding Washington was likely to succeed in its case. According to the ruling, Kalshi likely "offers illegal gambling activities to Washington consumers." The judge also rejected, at this stage, Kalshi’s argument that the Commodity Exchange Act overrides Washington’s gambling laws.
The order will not take effect before Aug. 5. The court is allowing additional submissions from both sides through Aug. 3 before the injunction becomes active.
Washington sued Kalshi in March, accusing the company of offering and advertising unlicensed online betting products tied to sports, elections and other real-world events. The Washington Attorney General’s Office is also seeking restitution and civil penalties.
Kalshi has maintained that states do not have authority over prediction markets offered on a federally regulated exchange. In a statement cited by The Block, a company spokesperson said, "States don’t have jurisdiction to regulate prediction markets."
The Washington ruling fits into a broader national fight over who controls event-contract markets: state gambling regulators or the Commodity Futures Trading Commission. The CFTC has argued it has exclusive authority over event contracts offered by registered derivatives exchanges, while multiple states have challenged sports-related markets as unlawful gambling.
Similar state actions have already surfaced in Michigan and New York. Minnesota has also filed the Washington ruling as supplemental authority in pending cases involving Kalshi, Polymarket and the CFTC.
For players, the immediate takeaway is narrow but important: this ruling applies to Washington residents and does not take effect before Aug. 5. More broadly, it shows that access to prediction markets can still change state by state while courts continue to sort out whether these products fall under federal commodities oversight, state gambling law, or both.
What comes next is the next round of briefing due by Aug. 3, followed by whether the injunction takes effect after Aug. 5 and whether higher courts weigh in on the preemption dispute.
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Source: As reported by crypto.news.
