‘No more’: Washington state sues Kalshi, alleging prediction market is illegal gambling

Washington Attorney General Nick Brown is suing prediction market platform Kalshi, alleging the company violates state gambling and consumer protection laws by operating an online betting service where users can wager on sports, elections, wars and other events.

The civil suit, filed Friday in King County Superior Court, seeks to shut down Kalshi’s operations in Washington, recover money lost by state residents and assess civil penalties. 

It’s the latest in a growing wave of state actions against the New York-based company, which is facing more than 20 civil lawsuits. Earlier this month, Arizona’s attorney general filed criminal charges against Kalshi, believed to be the first such case against a prediction market.

The Washington state complaint highlights a Kalshi advertisement in which one person texts another that they “found a way to bet on the NFL even though we live in Washington,” which the state says shows the company knowingly circumvented state law. 

GeekWire has contacted Kalshi for comment. The company has called similar legal actions in other states “meritless.”

Kalshi entered the sports betting market in early 2025 and now offers spread bets, over/under wagers and proposition bets on college and professional sports — all standard sportsbook products that are illegal in Washington outside of tribal lands, the complaint says.

But the complaint notes that Kalshi’s offerings go far beyond sports. The platform lets users bet on the total number of measles cases in a given year, what witnesses will say during a child trafficking hearing, and whether Iran’s supreme leader will be removed from power. 

The company also offers “mention markets” where bettors wager on specific words a TV host or politician will say during a broadcast, as noted in the complaint.

“Kalshi wants people betting on almost everything possible in life — the outcome of elections, Supreme Court cases, even wars,” Washington AG Brown said in a statement. “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.”

The complaint also takes aim at Kalshi’s marketing to young people, saying the company has targeted users between the ages of 18 and 21 and leveraged college student influencers to promote the platform. The state says Kalshi briefly attempted to recruit a 15-year-old influencer. 

On its own Instagram account, Kalshi once described its platform as “kind of addicting,” according to the complaint.

The industry has also drawn scrutiny after bettors on rival platform Polymarket made six-figure profits wagering on the capture of Nicolás Maduro and the killing of Iran’s supreme leader.

Kalshi, founded in 2018, is a designated contract market regulated by the Commodity Futures Trading Commission. The company has argued in other cases that its federal status preempts state gambling laws, a position that has been supported by the Trump administration and senior CFTC leadership.

That argument has produced mixed results in court. Federal judges in New Jersey and Tennessee have at least temporarily blocked state enforcement against Kalshi, while state‑court decisions in Massachusetts and Ohio have sided with state regulators by insisting that Kalshi obtain traditional sports‑betting licenses.

A bipartisan bill introduced this week by Sens. Adam Schiff (D-Calif.) and John Curtis (R-Utah) would ban sports betting on prediction market platforms.

Washington has some of the most restrictive gambling laws in the country. The state constitution prohibited gambling when Washington became a state in 1889, and the legislature banned internet gambling in 2006. The exception is sports wagers placed in person at tribal casinos.