A King County Superior Court judge has ordered Kalshi to stop offering a wide swath of its event contracts to Washington residents, setting a hard deadline for the exchange to wall the state off from its platform entirely. Judge John McHale's amended order, signed Wednesday, bars Kalshi from listing contracts tied to sports, elections, politics, entertainment, culture, tech and science, or so-called "mentions" markets for Washington-based users, while leaving contracts on commodities, climate, economics and finance untouched.
The order gives Kalshi a two-stage compliance window: the exchange must stand up IP-address and residency-based geofencing by August 19, then layer in a GeoComply multi-source geofencing system by September 2 to catch users attempting to route around the initial block. The staggered deadlines reflect the court's effort to close off both casual access and more determined workarounds in a single order.
Washington Attorney General Nick Brown's office said the ruling vindicates its argument that Kalshi has been running an unlicensed gambling operation under the guise of a federally regulated exchange. "We're holding Kalshi accountable for running an illegal gambling operation," Brown said in the office's statement announcing the order. The state's case rests on the Gambling Act and the Consumer Protection Act, and Judge McHale found Washington had shown a likelihood of success on claims under all three of the state statutes it invoked.
A Preemption Argument That Keeps Losing on the Ground
Kalshi's defense in Washington mirrors the one it has run in courtrooms across the country: that the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive jurisdiction over its contracts, preempting state gambling law entirely. That argument has had a mixed run this year. A Third Circuit panel accepted it in April, ruling that New Jersey could not enforce its gambling statute against Kalshi's sports contracts because they qualify as CFTC-regulated swaps. But the Ninth Circuit went the other way on Nevada's case, declining to block a state enforcement action and clearing the path for a temporary restraining order there.
Washington's Court of Appeals has now added to that split by denying Kalshi's request to stay the injunction while the underlying case proceeds, meaning the September 2 deadline stands regardless of how the broader jurisdictional question eventually resolves. The federal government has also weighed in directly: the CFTC and Department of Justice sued Arizona, Connecticut and Illinois in early April, seeking to block those states from moving against Kalshi and calling the litigation an “unprecedented measure” needed to protect the agency's exclusive jurisdiction.
Washington Joins a Crowded Docket
The Washington order lands amid a broader reckoning over how federal regulators intend to treat digital-asset-adjacent markets, a debate that has also shaped the White House's direct engagement with crypto industry executives in recent months. For Kalshi, the practical effect of the Washington ruling is narrower than a full shutdown but still significant: the exchange keeps its finance and commodities contracts live in the state while losing access to the sports and elections markets that generate much of its trading volume nationally.
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With courts now split across at least four circuits and additional state cases still working through the system, Kalshi's Washington compliance deadline is unlikely to be the last word. The company has not issued a public response to the amended order, but its consistent strategy elsewhere — appeal on preemption grounds while continuing to operate in favorable jurisdictions — suggests Washington will become one more data point in a fight that increasingly looks headed for the U.S. Supreme Court.
