Kalshi faces another state-level lawsuit after Washington state filed allegations Friday that the prediction market operator violated state gambling laws with its products.
Attorney General of Washington complaint cites the Pacific Northwest state’s ban on online gambling and other strict oversight of the gambling market, alleging that Kalshi violated the Washington Consumer Protection Act, the Gambling Act and the Gambling Recovery Act.
“The Kalshi website and app show consumers a range of events on which they can bet, and the odds on these different events, which determine how much the bettor will receive if the event occurs,” announcement said Attorney General Nick Brown. “This is exactly how bookmakers and other gambling entities operate. Kalshi advertises that they allow consumers to ‘bet on anything’ by simply calling their service a ‘prediction market’ rather than ‘gambling.’
The definition of gambling under Washington law is “to wager or risk something of value depending on the outcome of a contest of chance or future contingent event,” and Kalshi’s activity fully falls within that definition, the AG’s statement said. “Every Kalshi bet carries monetary risk, is partly based on chance, and promises payouts to winners.”
Kalshi immediately sought to take the case to federal court, arguing in it filing that the issues raised in Washington’s lawsuit are already pending in other federal courts and that there was “no warning or dialogue” from Washington State prior to the lawsuit.
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Earlier this month, a Nevada judge temporarily blocked Kalshi from doing business in the state, ruling that state authorities were likely to prevail in a legal dispute over whether the company’s event contracts violated Nevada gaming laws.
Carson City District Court Judge Jason Woodbury issued a temporary restraining order on Friday, joining the Nevada Gaming Control Commission’s request to block Kalshi from operating in the state for 14 days.
Kalshi argued that his contracts were subject to the exclusive jurisdiction of the U.S. Commodity Futures Trading Commission, an agency that supports forecasting markets pending in multiple state courts over accusations of offering illegal gambling.
Days earlier, Arizona Attorney General Kris Mayes announced charges against the companies behind Kalshi, alleging that the company operated “illegal gambling operations in Arizona without a license” and offered illegal election betting.
While Kalshi faces several similar cases brought by gaming authorities in other U.S. states over a platform allegedly offering sports gambling games to residents without a license, Arizona was among the first to file criminal charges.
The state-level cases come at a time when prediction markets are being scrutinized by lawmakers for offering bets on U.S. military activities, citing concerns about confidential information within the government.
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