By Todd Bishop on August 13, 2026 at 2:45 pm
A judge in Seattle ordered Kalshi to shut down large portions of its prediction market in Washington state by September 2nd – less than three weeks from now – and denied the New York-based company’s attempt to pause the order while it appeals the ruling.
The order by King County Superior Court Judge John McHale, issued Wednesday, requires Kalshi to geofence Washington users out of markets for sports, elections, politics, entertainment, culture, tech, and science, and ‘mentions,’ contracts on whether public figures will say specific words.
Kalshi can continue offering markets on commodities, climate, economics, and finance in the state. Users will also be allowed to close out positions they already hold in the prohibited categories.
The order sets a $120,000-a-day penalty if Kalshi misses the September 2nd deadline, although Kalshi can also submit an affidavit explaining any delay and let the court determine the final penalty.
The penalty would match what Nevada regulators are separately seeking from Kalshi in a June contempt motion for allegedly failing to comply with a similar injunction there.
In his ruling, McHale wrote that Kalshi “willfully ignored” a Washington State Gambling Commission notice from December 2025 stating that event-based contracts are not authorized in the state. He also concluded that ‘the public interests at stake and potential harm to consumers’ outweigh harm to Kalshi from the injunction.
Kalshi disputed the premise of the ruling on Thursday, reiterating its position that the U.S. Commodity Futures Trading Commission “has exclusive jurisdiction” over the exchange.
“We respectfully disagree with the court’s decision and are considering all legal options,” spokesperson Jacki McGavick said in a statement responding to the ruling.
Attorney General Nick Brown, who brought the suit, said in a statement that Kalshi “has gotten rich promoting wagers on sports, elections, natural disasters, events related to the Iran War, and more.”
However, Kalshi said its platform does not offer markets on wildfires, war, death, or terrorism. Kalshi has disputed reporting that has grouped its platform with Polymarket, which has drawn scrutiny for wildfire and other markets Kalshi says it doesn’t allow.
Kalshi had asked both McHale and the state Court of Appeals to pause the injunction pending appeal, and lost at both levels: a Court of Appeals commissioner denied an emergency stay request Monday, and McHale entered his own denial Wednesday with his larger order.
It’s the latest development in a case that Brown filed in March. McHale granted a preliminary injunction on July 20, finding Washington was likely to prove Kalshi is running illegal online gambling and rejecting the federal preemption argument. Kalshi appealed to the Court of Appeals and brought in former U.S. Acting Solicitor General Neal Katyal for its defense.
Kalshi’s remaining state-court options include asking a full Court of Appeals panel to review the commissioner’s ruling, or seeking emergency review at the Washington Supreme Court.
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Source: Tech
