State judge orders Kalshi to stop offering sports bets and other wagers

Key Points:

• A Washington state court ordered Kalshi to cease offering sports gambling and various other wagers on its prediction market in the state, citing lack of licensing and misleading advertising about the legality of its services.
• The court mandated Kalshi to implement IP address and residency-based geofencing by August 19 and a multi-source geofencing solution by September 2, with penalties of up to $120,000 per day for non-compliance.
• Judge John McHale found that Kalshi's operations violated state gambling and consumer protection laws, ruling that Washington is likely to succeed in its claims against the company.
• Kalshi disputes the ruling, arguing that the US Commodity Futures Trading Commission (CFTC) has exclusive jurisdiction over prediction markets, and is considering legal options while continuing to assert it does not offer markets on war, death, terrorism, or wildfires.
• The legal battle reflects a broader conflict between state regulations and federal oversight, with the CFTC recently declaring a "market emergency" in New York to block state gambling law enforcement against Kalshi, though the Washington court ruled that federal law does not preempt state gambling regulations.