Kalshi blocks Washington users amid legal battle over prediction markets

Kalshi, a major US prediction market platform, has begun blocking users in Washington following a court ruling that classified its event contracts as unlicensed gambling. The company is currently seeking reconsideration of an injunction from a King County judge, arguing that the state is applying a double standard by allowing competitors like OG to operate under similar models without similar restrictions.

Beyond Washington, Kalshi faces access restrictions in Michigan and Nevada as legal battles over federal preemption continue. The dispute highlights a growing tension between state gambling laws and federal oversight. While state attorneys general, such as Washington’s Nick Brown, argue these markets constitute illegal gambling, the Commodity Futures Trading Commission (CFTC) is moving to establish a comprehensive regulatory framework for event contracts.

CFTC Chairman Michael Selig has indicated that the commission intends to modernize oversight by implementing new consumer protection and market governance requirements. This federal push aims to assert exclusive jurisdiction over prediction markets. However, the industry faces significant opposition from traditional financial institutions; CME Group CEO Terry Duffy has criticized prediction markets, warning they are susceptible to manipulation.