Washington Sues Kalshi Over Illegal Online Gambling
Washington Sues Online Betting Platform Kalshi Over Alleged Illegal Gambling
Washington state has filed a lawsuit against the online betting platform Kalshi, accusing the company of offering illegal online gambling to residents. The state claims that Kalshi’s “prediction market” allows wagers on sports, elections, and other topics without the proper licensing.
The lawsuit, filed by Attorney General Nick Brown, argues that Kalshi violates Washington’s Gambling Act by providing unlicensed wagering on various subjects, including sports, entertainment, and even specific events like who will win a local election or the number of measles cases in a given year. Despite Kalshi’s branding as a “prediction market,” the state asserts that the service fits the legal definition of gambling.
Kalshi allows users to place bets on sports events such as spreads, under/overs, player props, and parlays. It also offers wagers on potential outcomes, like the words spoken during a TV show premiere or the total number of measles cases in a year. The state’s complaint highlights advertisements that specifically target Washington residents, including one promoting gambling on the NFL, despite the state’s prohibition on online gambling.
Washington outlawed online gambling in 2006, with the only exception being sports wagers placed on tribal lands. Kalshi is not licensed by the Washington State Gambling Commission to conduct online gambling. According to the filing, the platform exploits psychological triggers and is designed to encourage addictive behavior, driving impulsive, high-risk engagement. The complaint also alleges that Kalshi recruits college students and influencers to market its gambling app to young adults.
The lawsuit requests a list of all Washington residents who have used the platform and lost money, so the state can recover the funds lost by its citizens. This request is part of the state’s efforts to hold Kalshi accountable for violating state law.
Kalshi’s Response to the Lawsuit
In response to the lawsuit, Kalshi issued a statement, saying:
“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. As other courts have recognized, Kalshi is a regulated, nationwide exchange for real-world events, and it is subject to exclusive federal jurisdiction. It’s very different from what state-regulated sportsbooks and casinos offer their customers. We are confident in our legal arguments.”
The company emphasizes that it operates as a regulated exchange and is not subject to state gambling laws. Kalshi’s legal team is expected to challenge the state’s claims in court.
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