Washington State Attorney General Nicholas Brown filed a lawsuit on Friday, suing prediction market operator Kalshi for illegal gambling.
Key Takeaways
- Washington is the latest state to battle prediction markets in the courts.
- The state is targeting the legality of all Kalshi’s contracts, not just those involving sporting events.
- The lawsuit is seeking a permanent injunction, damages, and civil penalties.
Prediction markets news is rife with court proceedings as more states challenge the legality of their products. For instance, prediction markets offer trading on contracts that in many ways mimic sports betting, Meanwhile, the operators are unlicensed and unregulated as sports betting providers at the state level. Washington State is one of the latest states to join the legal fray.
NEW: Washington Attorney General sues online betting platform Kalshi in WA state court for illegal gambling, seeks injunction to halt unlawful activities, restitution to recover monies lost by WA residents, and civil penalties. Uses state court enforcement, not C&D. pic.twitter.com/K6r8LzwiXl
— Daniel Wallach (@WALLACHLEGAL) March 27, 2026
Washington State’s lawsuit, filed in Washington State King County Superior Court, is seeking a permanent injunction against the prediction market operator Kalshi, halting its operation in the state. It is also seeking any financial gains Kalshi received from its Washington operations. The state is also asking the Court to impose civil penalties for each violation of Washington’s State Consumer Protection Act and Gambling Act.
Both the lawsuit, and Attorney General Nick Brown’s subsequent press release, note that Washington State boasts some of the strictest gambling laws in the country. While some gambling is allowed on tribal lands, that is not true anywhere else in the state.
When Washington became a state in 1889, its constitution prohibited gambling on state lands. And to further strengthen its legal defenses against gambling, it passed legislation to clearly ban internet gambling in 2006. And it is obvious from the AG’s press release that he finds Kalshi’s operations particularly egregious.
“Kalshi wants people betting on almost everything possible in life – the outcome of elections, Supreme Court cases, even wars. For Kalshi, every event, every tragedy is nothing more than a potential way for Americans to risk their fortunes and for Kalshi to get rich,” said Brown. “As they advance this bleak vision of the future, they line their pockets and pat themselves on the back for sneaking around Washington’s gambling laws. No more.”
While prediction markets contend that their contracts are trades, rather than bets, that hair splitting might not help them in the Evergreen State. Washington state’s law defines gambling as “staking or risking something of value upon the outcome of a contest of chance or a future contingent event,” which, at face value, seems to encompass prediction market contracts.
