Washington Judge Blocks Kalshi Prediction Markets

A Washington state judge has granted a preliminary injunction against Kalshi, ruling that the prediction market operator likely ran an illegal gambling operation in the state and rejecting Kalshi's argument that federal commodities law overrides Washington's gambling laws. King County Superior Court Judge John McHale issued the order on July 20, 2026, with final injunction terms due by August 5, 2026. Washington becomes at least the fourth state to win a court order against Kalshi, though a separate federal appeals court has sided with Kalshi's preemption argument in a different case, leaving the core legal question unresolved nationally.

Key facts

• Ruling date: July 20, 2026, by King County Superior Court Judge John McHale, according to BettorsInsider.
• What is blocked: Kalshi offering prediction market contracts on sports, elections, politics, entertainment, culture and mentions markets to Washington residents, with final injunction terms due August 5, 2026, per Gambling Insider.
• Case filed: March 2026, when Washington Attorney General Nick Brown sued Kalshi, alleging it runs "an unlicensed online betting platform disguised as a financial exchange," per BettorsInsider.
• Conflicting ruling: the Third Circuit Court of Appeals ruled 2 to 1 in favor of Kalshi's federal preemption argument in a separate New Jersey case, creating a split in how courts are treating the same legal question.
• A New York federal judge, Analisa Torres, separately denied Kalshi's own bid for an injunction against that state's regulators on July 8, 2026, also rejecting Kalshi's preemption theory.

What did the Washington judge actually rule?

Judge McHale found that Washington had shown enough evidence to justify blocking Kalshi while the underlying case continues, writing that "the state has demonstrated a well grounded fear of immediate invasion of consumers' legal rights," according to KUOW. The order does not settle the case outright but stops Kalshi from continuing to offer the contested contracts to Washington residents while the litigation plays out, with the two sides due back before the court to finalize the exact terms of the injunction by August 5, 2026.

Why did the judge reject Kalshi's federal preemption defense?

Kalshi's central legal argument was that the Commodity Exchange Act, which gives the Commodity Futures Trading Commission authority over its federally registered contracts, preempts state gambling law entirely. Judge McHale rejected that argument, ruling that "the Commodity Exchange Act does not preempt Washington State gambling law" and that regulation of gambling and regulation of futures markets are different fields, according to Gambling Insider. That reasoning mirrors the approach New York federal judge Analisa Torres took on July 8, 2026, when she denied Kalshi's own request to block New York regulators, finding Congress had included a savings clause that preserves state authority over gambling even where federal commodities rules also apply.

What exactly is Kalshi and why is it fighting state gambling regulators?

Kalshi is a CFTC registered exchange that lets users trade contracts on the outcome of real world events, including sports results, elections and cultural moments, structuring them as regulated financial derivatives rather than bets. State gambling regulators in Washington and elsewhere argue the practical effect is indistinguishable from sports betting or event wagering, which many states, including Washington, tightly restrict or ban outside licensed and often tribal operated venues. Kalshi maintains that because the CFTC has already approved and regulates these contracts at the federal level, individual states cannot separately prohibit or license them.

How does this affect Kalshi's business in Washington?

Once the final injunction terms are entered, Kalshi will be barred from offering the listed categories of prediction contracts, sports, elections, politics, entertainment, culture and mentions markets, to people in Washington state. Washington has some of the strictest gambling restrictions in the country, having banned internet gambling since 2006 and limited legal sports wagering to in person betting on tribal land, according to BettorsInsider, which makes the state one of the harder markets for Kalshi to argue it should be allowed to operate unlicensed.

What has Washington's Attorney General said about the ruling?

Attorney General Nick Brown, who filed the underlying lawsuit against Kalshi in March 2026, called the injunction an important early win in the case. "This victory is the first step toward holding Kalshi accountable for their brazen violations of Washington law," Brown said, according to KUOW.

How has Kalshi responded to the Washington ruling?

Kalshi pushed back on the state's authority to act at all. A company spokesperson, Jacki McGavick, told KUOW: "States don't have jurisdiction to regulate prediction markets. We're disappointed to see Washington state continue wasting taxpayer dollars." The comment signals Kalshi is likely to keep litigating the preemption question rather than accept the state court's reasoning, consistent with its approach in New York and other states.

Which other states have taken legal action against Kalshi?

Washington is at least the fourth state to obtain a court order against Kalshi, following action in Massachusetts, Nevada and Michigan, according to Gambling Insider. Nevada's gaming regulator has gone further, with the Nevada Gaming Control Board separately pursuing contempt charges against Kalshi over noncompliance. New York did not grant Kalshi an injunction either, though procedurally it came from the other direction: federal judge Analisa Torres denied Kalshi's request to block New York regulators, which had the practical effect of upholding the state's authority to enforce its gambling law against the company.

Why did a federal appeals court rule the opposite way in New Jersey?

The Third Circuit Court of Appeals ruled 2 to 1 in favor of Kalshi's preemption argument in a New Jersey case, siding with the company's position that federal commodities regulation displaces state gambling law for its listed contracts. That outcome directly conflicts with what Washington's state court and New York's federal court have found, and it means the same legal question, whether the Commodity Exchange Act preempts state gambling law as applied to Kalshi's event contracts, is currently being answered differently depending on the court and jurisdiction.

How is the federal government involved in the states versus Kalshi fight?

The Commodity Futures Trading Commission has taken Kalshi's side in some instances. The CFTC filed lawsuits in April 2026 against Arizona, Connecticut and Illinois over those states' own attempts to restrict prediction markets, according to KUOW, adding a federal regulator directly into a fight that otherwise plays out mostly between state attorneys general and gaming regulators on one side and Kalshi on the other.

State by state snapshot of the Kalshi legal fight

State or court	Outcome	Date
Washington	Preliminary injunction granted against Kalshi	July 20, 2026
New York (federal)	Kalshi's injunction request denied, state authority upheld	July 8, 2026
New Jersey (Third Circuit)	Appeals court ruled 2 to 1 for Kalshi's preemption argument	Reported July 2026
Nevada	Court action against Kalshi, plus Gaming Control Board contempt pursuit	Ongoing in 2026
Massachusetts and Michigan	Among states with court orders against Kalshi	Prior to July 2026
Arizona, Connecticut, Illinois	Sued by the CFTC over state restrictions on prediction markets	April 2026

What happens next in the Washington case?

The parties are due back before Judge McHale to finalize the exact scope and wording of the injunction by August 5, 2026. The underlying Washington lawsuit, filed by Attorney General Nick Brown in March 2026, continues beyond this preliminary ruling, and Kalshi retains the option to appeal, consistent with its pattern of contesting similar rulings in other states.

"This victory is the first step toward holding Kalshi accountable for their brazen violations of Washington law." - Nick Brown, Washington State Attorney General

Frequently asked questions

What did the Washington judge rule against Kalshi?

King County Superior Court Judge John McHale granted a preliminary injunction on July 20, 2026, finding Washington had shown a likelihood that Kalshi ran an illegal gambling operation and rejecting Kalshi's argument that federal law preempts the state's gambling laws.

Is Kalshi now banned in Washington state?

Once final injunction terms are entered, expected by August 5, 2026, Kalshi will be barred from offering prediction contracts on sports, elections, politics, entertainment, culture and mentions markets to Washington residents while the underlying lawsuit continues.

Has any court ruled in Kalshi's favor on this issue?

Yes. The Third Circuit Court of Appeals ruled 2 to 1 in favor of Kalshi's federal preemption argument in a New Jersey case, creating a conflict with the outcomes in Washington and New York.

How many states have taken legal action against Kalshi?

Washington is at least the fourth state to win a court order against Kalshi, following Massachusetts, Nevada and Michigan, while New York separately denied Kalshi's own injunction request against its regulators.

What has Kalshi said in response to the Washington ruling?

A Kalshi spokesperson, Jacki McGavick, said states do not have jurisdiction to regulate prediction markets and called Washington's litigation a waste of taxpayer dollars.

Is the CFTC involved in these state lawsuits against Kalshi?

Yes, though on the opposite side in some cases. The CFTC filed lawsuits in April 2026 against Arizona, Connecticut and Illinois over those states' own restrictions on prediction markets.

Updated July 2026.