King County Superior Court Judge John McHale has issued an order against prediction market platform Kalshi. The company is now barred from offering event contracts in the state of Washington across various categories, including sports, elections, politics, entertainment, culture, technology, science, and ‘mentions’ contracts.
The order, signed on Wednesday, modifies and affirms the terms of a preliminary injunction granted by McHale in July. Despite being strictly barred from pop culture and politics, Kalshi received a minor exception. The judge ruled that prediction contracts for commodities, climate, economy, and finance can still operate without interruption.
Geographic Restrictions in a Matter of Days
To ensure the block is enforced, the court has set a strict deadline. Kalshi is required to implement an IP address and residency data-based geofencing system by August 19, 2026. This access restriction will be further tightened less than a month later, as the platform is required to implement a multi-source geofencing system from GeoComply by September 2, 2026.
This order from the Washington court extends a series of legal troubles surrounding the company. This is a new development after the platform faced similar issues involving the federal regulator, the CFTC, and a case in Baltimore. Now, Washington state authorities are using a court ruling to squeeze Kalshi’s operations.
Clash of Federal and Local Laws
The dispute boils down to a battle over who has the authority to regulate prediction markets. Judge McHale found that the federal Commodity Exchange Act does not preempt Washington’s gambling laws. The court assessed that the state’s arguments have a high likelihood of success, relying on three local gambling laws.
Washington Attorney General Nick Brown made his office’s stance clear. “We are holding Kalshi accountable for illegal gambling operations,” he said. On the other side, Kalshi has refused to submit to local rules, maintaining that only the Commodity Futures Trading Commission (CFTC) holds exclusive jurisdiction over their exchange.
Request for Stay Denied
Kalshi’s attempts to fight back through the appeals process have hit a dead end. The Washington Court of Appeals denied the company’s request to stay the injunction. This appeals court decision forces the platform to comply and cut off access for Washington residents according to the schedule set by Judge McHale.
This early defeat at the state level presents operational challenges for the prediction exchange. While awaiting the court’s final ruling, Kalshi has been forced to pull its services from Washington amid high traffic from voters and political speculators this year.
As reported by Cointelegraph.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
