Kalshi Blocked in Washington; Polymarket Remains Legal For Now

Add another state to the list of where Kalshi is blocked. In Washington, however, other prediction markets will remain available.

King County Judge John McHale issued an injunction against Kalshi, ordering it to geofence Washington by August 5. But because Washington attorney general Nick Brown only focused his lawsuit on Kalshi, other prediction markets aren’t affected by the lawsuit.

McHale’s order spells out that Kalshi can ask for different terms if it does so by August 3. That could come in the form of a settlement, an extension or other resolutions to the dispute. If there are no changes, the order will see Kalshi blocked in Washington by August 5.

It’s a blow to Kalshi’s business model, as it requires the prediction market operator to geofence Washington right before the NFL season begins. With the Seattle Seahawks defending their Super Bowl title, enthusiasm for football bets was likely to be at a high.

Those will now likely return to tribal lands in Washington. The Evergreen State does not have statewide mobile sports betting. It only allows bets to take place on tribal lands, either in-person at a casino or on an app partnered with the tribes. While states such as Florida and Wisconsin have frameworks to allow gambling from a server on tribal land, Washington does not.

Why Is Only Kalshi Blocked in Washington?

It’s unclear why Brown’s office chose to focus solely on Kalshi. The attorney general’s team didn’t give insight, dodging the question when placed.

“Our litigation with Kalshi is not a comment one way or the other on the activities of other ‘prediction market’ platforms,” deputy communications director Mike Faulk told the Seattle Times.

Kalshi is the largest of the prediction market platforms, but other options remain. Polymarket and Robinhood both remain unaffected, even as Robinhood is suing Washington. That platform filed suit in April, attempting to prevent a suit against it.

Brown’s office first filed against Kalshi in March. In it, Brown cited both the Gambling Act and the Consumer Protection Act. The latter’s enforcement could be critical, as Brown’s office has the ability to request up to $7,500 per violation.

What Does the Injunction Mean for Kalshi?

McHale’s injunction says two things. First, the decision to have Kalshi blocked in Washington says that Washington is likely to succeed on the merits of the case. Second, it suggests Kalshi’s legal strategy might have problems.

Kalshi has maintained that states cannot have jurisdiction over prediction markets. McHale, however, didn’t accept that argument. The judge found that Congress never meant for contract law to apply to gambling, something states have long stated.

While the executive branch of the federal government has accepted Kalshi’s position, the courts have been more inconsistent. Kalshi has found success from the Third Circuit Court of Appeals, but it’s had more legal defeats than victories.

What’s the Overall Status of Prediction Markets?

With Kalshi blocked in Washington as of August 5, it’s now effectively inoperable in three states: Michigan, Nevada and Washington. Other states, such as Minnesota and Utah, have attempted to block Kalshi, but have legal issues pending that prevent enforcement.

As the lawsuits continue to pile up, it looks more likely that the Supreme Court might eventually have to decide.