A judge has ordered Kalshi to stop offering most of its prediction market contracts in Washington state, ruling that they likely constitute an illegal gambling operation. King County Superior Court Judge John Mc Hale in Seattle signed a preliminary injunction on August 13, 2026, after state regulators argued the platform's bets violated gambling laws.\n\nThe injunction requires Kalshi to implement an IP address- and residency-based geofence by Aug. 19, followed by more robust restrictions through a third-party software platform by Sept. 2. Failure to comply could result in further legal action.\n\nPrediction markets like Kalshi allow users to wager on the outcomes of events such as elections and economic data.

Washington regulators argued these bets amount to illegal gambling under state law, a view the judge adopted. This ruling marks a significant setback for the prediction market industry, which has increasingly faced scrutiny over whether its products constitute gambling or legitimate financial instruments. Kalshi must now restrict access in Washington while the case proceeds.