Kalshi claims it doesn’t have to follow state laws
To get a preliminary injunction, a plaintiff must show they are likely to succeed on the merits of their claims. McHale found that Washington is likely to succeed in proving its claims that Kalshi violated state laws on gambling and consumer protection.
“Kalshi operates an online betting platform that it advertises as a ‘prediction market’ and that allows consumers to bet on thousands of topics ranging from sports, political elections, entertainment, popular culture, and whether public figures will utter specific words or phrases (mentions’),” McHale wrote.
The judge found that “Kalshi’s provision, marketing, and advertising of illegal gambling activities constitute unfair and/or deceptive acts or practices in trade or commerce” under Washington law.
Brown hailed the court ruling, saying that “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.”
Kalshi argues that it doesn’t have to follow state laws because the US Commodity Futures Trading Commission (CFTC) has exclusive jurisdiction over prediction markets. The Trump administration has repeatedly made the same argument and sued states that try to regulate the platforms. The battle involving states, the US government, and Kalshi is being litigated in state and federal courts throughout the country.
“Kalshi is regulated by the CFTC, which has exclusive jurisdiction over our exchange,” a Kalshi spokesperson said in a statement provided to Ars today. “We respectfully disagree with the court’s decision and are considering all legal options.”