Kalshi, founded in 2018 and publicly launched around 2021, operates as a CFTC-designated contract market for event contracts — a category of commodity derivatives. The company expanded aggressively into sports betting in 2025 and has marketed its platform as “legal betting in all 50 states.”
Washington has among the strictest gambling statutes in the country. Its 1889 state constitution prohibited gambling on state lands. The 1973 Gambling Act tightly limited most forms of wagering, and the 2006 legislation explicitly banned online gambling. State officials insist Kalshi operates outside all three frameworks.
Washington residents using Kalshi may lose access to the platform while litigation proceeds. The state’s restitution claim draws on the Recovery of Money Lost at Gambling Act, which allows consumers to reclaim gambling losses.
The case is in its earliest stages. The federal transfer ruling will determine which court hears the matter first.
FAQ What is Kalshi being sued for in Washington? Washington AG Nick Brown alleges Kalshi operates an illegal online gambling service in violation of the state’s Gambling Act and Consumer Protection Act. Is Kalshi legal in Washington State? Washington says no — the state is seeking a permanent injunction to block Kalshi from operating within its borders. How does Kalshi respond to the Washington lawsuit? Kalshi moved the case to federal court, arguing it operates under exclusive CFTC jurisdiction that preempts state gambling laws. What states have taken action against Kalshi? Washington, Arizona, Nevada, Ohio, and at least 11 other states have filed lawsuits, criminal charges, or cease-and-desist orders against Kalshi or rival prediction markets.
