Attorney General Nick Brown Sues Kalshi To Shut Down Washington Operations, Compel User Disclosures

Washington's latest move marks the most significant development in the Kalshi saga to date: Attorney General Nick Brown has filed a civil suit in King County Superior Court seeking to bar Kalshi from operating in the state and to obtain an injunction to shut down its Washington operations.

“Washington Attorney General Nick Brown on Friday announced that thestate is suing Kalshi, a popular online prediction market platform, for “illegal gambling”

Bellingham Herald

The filing argues Kalshi violates Washington's Gambling Act and Consumer Protection Act by offering an online betting service on a broad array of topics—from sports to elections to war—that consumers can wager on.

Bellingham Herald

Kalshi has pushed back, noting that it is a federally regulated exchange under exclusive federal jurisdiction.

The action comes amid a broader wave of state actions against Kalshi, following Nevada's temporary ban and other state measures that challenge Kalshi's legality in local markets.

The single most important element of the WA suit is the relief Washington seeks and the way it spells out Kalshi's obligations if the court grants it.

The state requests an injunction to stop Kalshi's operations in Washington and to halt the alleged unlawful activities immediately, plus an order to recover money Washington residents have lost and to assess civil penalties.

CoinDesk

Brown's office also asks the court to compel Kalshi to disclose the entirety of Washington residents who used the platform, so restitution can be pursued.

Evidence cited by the filing includes Kalshi advertisements that appear to acknowledge Washington’s legal exposure, such as a message claiming you can 'bet on the NFL even though we live in Washington.'

Kalshi’s own public positioning—promoting a platform that covers elections, wars, and other hot topics—has been used to argue that the service is functionally a gambling operation disguised as a 'prediction market.'

On legal theory, Washington anchors its case in a straightforward, long-standing definition of gambling while positioning Kalshi’s operations as a direct fit.

“Kalshi is facing another state-level lawsuit after the state of Washington on Friday filed allegations that the prediction market operator violated state gambling laws with its products”

Cointelegraph

The state argues that Kalshi’s bets—ranging from sports to elections to public-health topics—risk money and rely on chance, which it says crosses the line into illegal gambling under Washington law.

Kalshi frames itself as a federally regulated exchange under the Commodity Futures Trading Commission and has stressed exclusive federal jurisdiction.

Washington contends that calling something a 'prediction market' does not exempt it from the state's anti-gambling statutes when the activity operates as a broad wagering platform.

This Washington action sits squarely within a broader, national push against Kalshi that regulators are watching closely.

Nevada recently issued a temporary restraining order blocking Kalshi from offering event contracts in the state, and Arizona charged Kalshi with operating an unlicensed wagering business.

FOX 13 Seattle

A coalition of 39 state attorneys general has challenged federal interpretations that prediction markets fall under exclusive federal oversight, arguing that Congress must authorize such power.

The CFTC has backed Kalshi's view in certain forums, complicating the legal landscape and potentially shaping future state enforcement and federal preemption battles.