TLDR
- Washington court directed Kalshi to halt event contracts covering sports, elections, politics, entertainment, culture, technology, science, and mentions within the state.
- The platform must implement IP- and residency-based geofencing by Aug. 19, followed by a multi-source geofencing system by Sept. 2.
- Advertising restricted event contracts to Washington residents has been prohibited under the court directive.
- Contracts related to commodities, climate, economics and finance remain permitted for Washington users.
- This directive follows a July preliminary injunction, with Kalshi’s appeal to suspend the restrictions being rejected.
A Washington state court has issued an order requiring Kalshi to cease providing multiple event contract categories to state residents. The directive encompasses markets connected to sports, elections, politics, entertainment, culture, technology, science, and mention-based events.
Kalshi Receives Directive to Block Washington Access
The court mandated Kalshi to prevent Washington state users from accessing restricted markets. The platform must deploy IP- and residency-based geofencing technology by Aug. 19. An enhanced multi-source geofencing system must follow by Sept. 2.
The directive additionally prohibits Kalshi from marketing restricted contracts to consumers residing in Washington. The court determined that advertising products deemed unlawful gambling could violate state consumer protection statutes.
The order permits certain Kalshi products to remain accessible in Washington. Contracts associated with commodities, climate, economics, and finance continue to be available under the present directive.
These restrictions stem from a preliminary injunction originally issued in July. Kalshi subsequently petitioned the Washington Court of Appeals to suspend the order, which the court denied.
State Challenge to Event Contracts Progresses
Washington joins multiple states questioning Kalshi’s event contract offerings. State authorities contend that certain contracts, particularly sports markets, function as gambling and require compliance with local betting regulations.
Kalshi has maintained that the Commodity Exchange Act grants the Commodity Futures Trading Commission principal jurisdiction over its markets. The company contends that federal regulatory oversight should supersede state gambling statutes.
The legal question revolves around whether federal derivatives legislation preempts states from enforcing their gambling laws on federally regulated event-contract platforms serving customers within state boundaries.
Baltimore filed legal action against Kalshi and Polymarket on Thursday. The city alleged both prediction market platforms provide illegal gambling products.
Washington Attorney General Nick Brown indicated the state plans to maintain enforcement of local laws throughout the litigation. The current order maintains restrictions while the broader legal challenge advances.
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