Washington sues Kalshi prediction market over ‘illegal gambling’
.png "Washington Attorney General Nick Brown on Friday announced a new lawsuit against Kalshi, a popular prediction market platform.")
Washington Attorney General Nick Brown on Friday announced that the state is suing Kalshi, a popular online prediction market platform, for “illegal gambling.”
The civil consumer protection case against the company, filed in King County Superior Court, argues that Kalshi ran afoul of state law by advertising and operating a platform where people place bets on events such as elections, sports and wars.
Brown said at a March 27 news conference that online gambling, which is illegal in Washington, is highly addictive and often targeted toward children and young people.
He added that although Kalshi calls itself a prediction market, its website is clearly a gambling site.
“As we’ve seen in many instances, online prediction platforms like Kalshi are rife with the potential for insider trading and corruption,” Brown said at the news conference.
Kalshi spokesperson Elisabeth Diana denied the attorney general’s claims in an emailed statement.
“If AG Brown hadn’t sued us ahead of our scheduled meeting with him, he would have known better than to say we offer war markets. We don’t,” she said.
Diana added that Kalshi is a regulated exchange for real-life events that is “subject to exclusive federal jurisdiction,” as acknowledged by other courts. That makes it different from what customers are offered by state-regulated sportsbooks and casinos, she said, and Kalshi is confident that its legal arguments are strong.
Online gambling, Brown said, can lead those with addiction issues to lose their families and homes. He argued that Kalshi’s activities fall under the state’s definition of gambling.
“If it’s a bet on a game of chance or a potential future event, then it’s gambling,” he said.
Kalshi’s website counters that the prediction market isn’t sports betting because it acts as an exchange for users to trade against one another, similar to how the stock market functions. Sportsbooks, it says, take the opposite side of whatever customers bet.
The FAQ on Kalshi’s site includes a question about how the company is able to offer sports-related “event contracts” in places that ban such betting. Its answer: Kalshi is regulated by federal law and the Commodity Futures Trading Commission since it’s more like a stock market than a casino.
“The Commodities Exchange Act is a comprehensive law that governs contracts on federally licensed exchanges like Kalshi, and its comprehensive statutes mean we’re subject to federal — not state — laws and regulations,” Kalshi’s answer continues.
Washington brought another lawsuit this year related to illegal gambling, Brown said Friday, calling it part of a serious public health problem. That February suit took aim at multiple companies, such as Playtika and Aristocrat, that the AG’s office argues have operated unlicensed and unlawful casino apps.
Brown’s office contends that in one Kalshi ad, the company appeared to acknowledge that it has worked to dodge state law. The ad shows a person texting someone else that, despite living in Washington, they’d “found a way to bet on the NFL.”
This isn’t the first lawsuit filed against Kalshi.
Earlier this month, Arizona became the first state to accuse the company of having committed criminal violations, according to NPR. Prosecutors claimed that Kalshi is operating “an unlicensed online gambling operation” that allows residents to bet on elections and sports without having obtained state-regulator approval. Elections gambling is illegal in Arizona while a state gaming commission regulates betting on sports.
In addition, more than 20 civil lawsuits have been filed over the prediction market platform’s legal status, NPR notes.
Brown’s suit alleges that Kalshi has violated the Consumer Protection Act and the Washington state Gambling Act. The complaint also aims to assess civil penalties and recoup money that Washington users lost.
Kalshi has allowed betting on topics like the number of “measles cases this year” and possible Iran war outcomes, according to the AG’s news release.
“For Kalshi, every event, every tragedy is nothing more than a potential way for Americans to risk their fortunes and for Kalshi to get rich,” Brown said in the release. “As they advance this bleak vision of the future, they line their pockets and pat themselves on the back for sneaking around Washington’s gambling laws. No more.”
Editor’s note: This story has been updated with additional information, as well as comments from Attorney General Nick Brown and Kalshi spokesperson Elisabeth Diana.
This story was originally published March 27, 2026 at 12:07 PM.
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