Kalshi faces a new lawsuit from Washington over claims its prediction markets constitute illegal gambling, following similar actions in Nevada and Arizona.
The Washington attorney general filed a lawsuit against Kalshi on Friday, alleging the prediction market operator violated state gambling regulations. The complaint claims Kalshi's platform functions like a sportsbook by allowing bets on various events, breaching the Washington Consumer Protection Act, Gambling Act, and Recovery of Money Lost at Gambling Act.
According to the announcement from Attorney General Nick Brown, Kalshi's services involve staking money on outcomes of contingent events, which fits the state's definition of gambling. The suit argues that Kalshi misleadingly labels its operations as 'prediction markets' to evade gambling oversight.
Kalshi responded by seeking to move the case to federal court, stating that the issues are already under litigation in other federal courts and that Washington provided no prior warning or dialogue. This move highlights Kalshi's defense that its contracts fall under the jurisdiction of the U.S. Commodity Futures Trading Commission.
Related Legal Actions in Other States
In Nevada, a judge issued a temporary restraining order earlier this month, blocking Kalshi from operating in the state for 14 days due to alleged violations of local gambling laws. The Nevada Gaming Control Board argued that Kalshi's event contracts constitute illegal gambling.
Arizona Attorney General Kris Mayes announced charges against Kalshi days earlier, accusing the company of running an unlicensed gambling business and offering illegal election wagering. Arizona was among the first states to file criminal charges in this matter.
These state-level lawsuits reflect broader scrutiny of prediction markets, with authorities in multiple U.S. states challenging Kalshi over unlicensed sports gambling and other betting activities. The cases underscore ongoing regulatory debates, as reported by CoinTelegraph.
