Washington Initiates New Gambling Lawsuit Against Kalshi

(AsiaGameHub) –   Washington has become the newest state to initiate legal proceedings against Kalshi, the prediction market platform alleged to offer contracts that constitute illegal gambling under state law. 

“Each Bet Risks Money”

Filed on Friday, March 27, in King County Superior Court by Attorney General Nicholas W. Brown, the lawsuit asserts that the company’s operations breach some of the strictest gambling regulations in the United States.

Once again, the case centers on Washington’s definition of gambling: putting something of value at risk on the outcome of a game of chance or a future event beyond an individual’s control, with the expectation of a reward. 

The complaint states that Kalshi’s markets align precisely with that definition—whether they involve sports, politics, or cultural events.

“Each bet risks money, relies in part on chance, and promises a payout to winners,” the lawsuit reads. 

Washington law permits sports betting only at tribal casinos, making the state one of the most restrictive jurisdictions in the country.

Attempt to Recover Residents’ Lost Money 

This is not Kalshi’s first legal hurdle. Washington joins Massachusetts, Nevada, and Michigan in bringing civil lawsuits, while Arizona has pursued criminal charges against the company. 

To date, Nevada is the only state where Kalshi has been forced to discontinue specific offerings—including sports-related contracts—following a temporary restraining order.

The Washington complaint goes beyond just seeking to halt operations; it also aims to recover money lost by residents who used the platform. 

Citing the state’s Recovery of Money Lost at Gambling Act, officials contend they have the right to retrieve funds on behalf of users, though no exact figure has been provided.

Kalshi’s business model may depend on a legal gray area, as state law includes an exemption for legitimate business transactions like contracts tied to commodities or securities. 

The statute itself does not explicitly mention event contracts, but its wording allows for interpretation—a point that could become key in court.

Additionally, the lawsuit alleges Kalshi profits from trade fees and operates in a manner similar to bookmaking. It further claims the company illegally transmits gambling information online and maintains prohibited records and devices.

Looking ahead, Kalshi might attempt to transfer the case to federal court, where it could argue that federal law governs its activities. Similar efforts in other states have yet to succeed.