{"id":70425,"date":"2026-03-30T23:04:05","date_gmt":"2026-03-30T23:04:05","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/washington-state-targets-kalshi-in-illegal-online-betting-lawsuit-legal-bitcoin-news\/"},"modified":"2026-03-30T23:04:05","modified_gmt":"2026-03-30T23:04:05","slug":"washington-state-targets-kalshi-in-illegal-online-betting-lawsuit-legal-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/washington-state-targets-kalshi-in-illegal-online-betting-lawsuit-legal-bitcoin-news\/","title":{"rendered":"Washington State Targets Kalshi in Illegal Online Betting Lawsuit \u2013 Legal Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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Is Kalshi Legal in Washington State? AG Says No, Files Suit<\/h2>\n

The complaint<\/a>, filed in King County Superior Court, targets Kalshi<\/a>\u2018s binary event contracts, wagers priced between one cent and 99 cents that pay out $1 to winners and nothing to losers. Washington argues those contracts meet the state\u2019s statutory definition of gambling under RCW 9.46.0237: \u201c staking<\/a> or risking something of value upon the outcome of a contest of chance or a future contingent event not under the person\u2019s control.\u201d<\/p>\n

Brown\u2019s office is seeking a permanent injunction, full restitution for Washington<\/a> residents\u2019 losses, disgorgement of Kalshi\u2019s profits, and civil penalties for each violation. Investigators also want a full accounting of every Washington user\u2019s transactions.<\/p>\n

The AG\u2019s office did not limit its targets to sports betting. The complaint accuses Kalshi of offering markets on elections, Supreme Court cases, entertainment outcomes, public health data, and international conflicts. \u201cFor Kalshi, every event, every tragedy is nothing more than a potential way for Americans to risk their fortunes,\u201d Brown said in a statement accompanying the filing<\/a>.<\/p>\n

Kalshi, founded in 2018 and publicly launched around 2021, operates as a CFTC-designated contract market for event contracts \u2014 a category of commodity derivatives. The company expanded aggressively into sports betting in 2025 and has marketed its platform as \u201clegal betting in all 50 states.\u201d<\/p>\n

The company moved the case to federal court immediately after the filing, citing exclusive federal jurisdiction. A Kalshi spokesperson said<\/a> Brown\u2019s office had a scheduled meeting with Kalshi<\/a> before filing suit and that going forward with the complaint was premature. Kalshi also disputed specific market claims in the complaint, saying it does not offer war markets as alleged.<\/p>\n

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.<\/p>\n

Washington is not acting alone. At least 11 states have issued cease-and-desist orders against prediction market<\/a> platforms. Arizona filed criminal charges against<\/a> Kalshi in March 2026. Nevada obtained a temporary restraining order<\/a> barring Kalshi from offering sports, politics, and entertainment markets, and a separate 60-day preliminary injunction covering Coinbase\u2019s Kalshi-powered products. An Ohio federal judge ruled<\/a> Kalshi must follow state gambling laws for sports betting.<\/p>\n

Kalshi has also notched federal wins. Courts in New Jersey<\/a> and Tennessee ruled<\/a> in its favor. A case in Michigan involves rival platform Polymarket, which filed preemptively. Utah, where Kalshi sued to block a proposed ban, remains active.<\/p>\n

The legal conflict centers on a direct clash between state police powers and federal commodities law. The CFTC<\/a> has issued guidance on manipulation and is weighing additional rules. Trump administration CFTC Chair Brian Selig and prior agency amicus briefs have sided with federal preemption.<\/p>\n

Legal experts tracking the cases say the disagreement could reach the U.S. Supreme Court. States argue prediction market<\/a> platforms are sportsbooks operating without state licenses, targeting young adults through leaderboards, push notifications, and influencer promotions. Kalshi disputes that framing, saying its exchange is structurally different from state-regulated sportsbooks and casinos.<\/p>\n

Washington residents using Kalshi may lose access to the platform while litigation proceeds. The state\u2019s restitution claim draws on the Recovery of Money Lost at Gambling Act, which allows consumers to reclaim gambling losses.<\/p>\n

The case is in its earliest stages. The federal transfer ruling will determine which court hears the matter first.<\/p>\n

FAQ \ud83d\udd0e<\/h2>\n