A Washington State judge in the United States has issued a final order requiring Kalshi, the forecast market platform, to stop providing multi-incident contracts in the state. According to the State prosecution, the court found that Kalshi was likely to violate the State of Washington Gaming Act and the Consumer Protection Act and that the business in question constituted an illegal gambling business.
The court requested that the deadline be closed and that the geographical fence be installed.
According to the order, Kalshi is not permitted to provide, accept or promote multiple types of bets in Washington State, including sports, elections, politics, recreation, culture, science and technology, and science, as well as “conferences” contracts. Such products allow the user to bet on whether a public figure will say a particular word.
The Court also requested the Platform to activate the geographical fence based on IP addresses and residence information by 19 August and to go online the multi-source geographical fence programme by 2 September. According to the Office of the Attorney-General of the Länder, the restricted categories of contracts cover a significant part of the Kalshi business, where the share of sport-related products is increasing.
Advertising is also banned.
At the same time, the Court prohibited Kalshi from promoting the contract in Washington State, finding that its marketing of illegal gambling products could constitute “unfair or deceptive acts”.
In its prosecution case, the State Prosecution mentioned that Kalshi had published an outreach post which indicated that a user had sent a text saying that he “had found a way to bet NFL even if he lived in Washington”. On this basis, the prosecution contends that the platform is aware that its products are circumventing the state ' s legal restrictions.
The state government and the CFTC are in conflict.
Two days before the decision was issued, the United States Commodity Futures Trading Commission (CFTC) had just exercised emergency powers to require Kalshi to continue to operate in accordance with the core principles of the Commodity Exchange Act. This decision stems from the fact that the Platform informed the regulator of what is known as a “market emergency” after its prosecution in New York.
The position of the CTC is that the incident contract is a cross-state derivative transaction and should not be subject to the state lottery law. For its part, the State of Washington considered that each of Kalshi ' s bets was a monetary bet on the outcome of an uncertain event, consistent with the definition of gambling in state law.
Around this issue, Kalshi has indicted nine states. The proceedings first involved Illinois, Arizona and Connecticut, and then extended to Wisconsin and Minnesota. In the meantime, Trump also publicly supported Kalshi and criticized state officials opposed to the forecast market.
There was a clear signal from the interim injunction.
This final order was based on a preliminary injunction in July. The judge was of the view that, without restrictions on the continued operation of Kalshi, consumers in Washington State were likely to face “significant harm”.
Subsequently, the Washington State Court of Appeal also rejected Kalshi ' s request for a stay of execution. This means that, despite the support of federal regulators, Kalshi ' s resistance at the level of state courts continues to grow.