Kalshi off-limits in multiple states as prediction markets, CFTC team up for battle
Prediction market platform Kalshi is facing legal challenges in Washington state, where it has been banned for allegedly operating illegal gambling. The company is fighting back by highlighting inconsistent enforcement compared to competitors like Crypto.com.
Why it matters
Illustrates the ongoing regulatory friction between emerging prediction markets and state-level gambling laws in the U.S.
A legal dustup in Washington state is the latest development of many state-level fights, but the industry is getting a robust defense from its federal regulator, the Commodity Futures Trading Commission, which is also simultaneously hatching a number of rule proposals to formally govern prediction markets in the U.S.
In Washington, a statewide ban of Kalshi emerged from a local court last week in a dispute in which authorities accused the company of operating an illegal gambling business there. So Kalshi sent an email to customers this week, beginning: "The Washington state government has blocked your right to trade freely on Kalshi."
Washington's take: “Kalshi has gotten rich promoting wagers on sports, elections, natural disasters, events related to the Iran War, and more. Under this order, Kalshi is banned from offering wagers on most of those topics in Washington,” according to state Attorney General Nick Brown .
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