Judge finds Kalshi’s online gambling likely violates state law

The Office of the Attorney General won a preliminary injunction Monday in its case against KalshiEX (Kalshi) after a King County Superior Court judge found that Kalshi likely violated the Washington Gambling Act and the Consumer Protection Act by running an illegal gambling operation in Washington. 

The Court will issue a final order prohibiting Kalshi from continuing to violate Washington law on August 5, giving Kalshi and the AG’s office time to confer on the terms of the injunction and provide further briefing to the Court about appropriate remedies.

“This victory is the first step toward holding Kalshi accountable for their brazen violations of Washington law,” said AG Nick Brown. “Kalshi padded their pockets as they promoted illegal betting on sports, elections, the total number of measles cases this year, what will witnesses say during a child trafficking hearing, and even natural disasters.”

The definition of gambling under Washington law is “staking or risking something of value upon the outcome of a contest of chance or a future contingent event,” and Kalshi’s activities fall squarely within that definition. Each Kalshi bet risks money, relies in part on chance, and promises a payout to winners. Kalshi’s website and app show consumers a range of events that they can bet on and the odds for those various events, which dictate how much the bettor will be paid out if the event occurs. This is exactly how sportsbooks and other gambling operations function.

Kalshi advertises that they allow consumers to “bet on anything” by simply calling their service trading on a “prediction market” rather than “gambling.” In one Kalshi advertisement, one person texts another that they “found a way to bet on the NFL even though we live in Washington,” which seems to acknowledge that Kalshi knows that they are attempting to skirt state law. The court ruled that “Kalshi’s provision, marketing, and advertising of illegal gambling activities constitute unfair and/or deceptive acts or practices.”

From the beginning, when Washington became a state in 1889, its constitution prohibited gambling on state lands, and the state continues to carefully regulate gambling activities to protect and safeguard the public to this day. In 2006, the Legislature amended the 1973 Gambling Act to make it clear that internet gambling is prohibited under Washington law. 

To win a preliminary injunction, Washington state needed to show that it was likely to succeed on its claims against Kalshi as the case progresses. The state also needed to show a likelihood of “substantial injury to Washington consumers” if the court did not issue an injunction. The judge ruled that the state successfully made both of these showings.

Read the order.

If you or someone you know is suffering from gambling addiction or gaming disorder, please contact the Washington State Problem Gambling Helpline at 1-800-547-6133. Other resources can also be accessed here.

Consumers wanting to file a complaint with the Consumer Protection Division should call 1-800-551-4636 or 1-800-833-6384 for the hearing impaired or visit the AG web site at https://www.atg.wa.gov/file-complaint.