Washington Attorney General Says Kalshi is Violating Gambling Laws

Washington Attorney General Nick Brown says his office has filed a lawsuit against online prediction market company Kalshi, alleging it has violated state gambling laws. 

The lawsuit, filed in King County Superior Court, claims Kalshi is in breach of laws that ban most kinds of gambling other than sports bets placed on tribal lands. Brown is seeking a preliminary injunction to halt the company’s operations in the state while the case proceeds. His office also intends to assess potential damages. 

“For the past few years, the online gambling company Kalshi has allowed people to bet on almost every aspect of our lives. Sports, elections, the length of presidential press conferences,” Brown said. “And the company takes in huge sums of money from Washingtonians. And when it does that, it violates Washington state law.” 

Kalshi claims to be a futures trading company where users trade on the outcomes of real-world events. Its trading volume reached $23.8 billion in 2025, with more than 90% of that volume being from sports.  

According to the complaint, users can place wagers on a wide range of topics, including political events such as local elections in Washington state and US national elections, as well as international races, and other subjects, such as public health metrics and legal proceedings. 

The lawsuit also cites expanded betting options available in the Washington sports betting market, including wagers on game scores, point differentials, and individual player performance. It also references bets placed on a January college basketball game between Gonzaga and Seattle U.

The Attorney General’s Office also pointed to Kalshi’s advertising, including promotions suggesting users could bet on the NFL despite state restrictions, and also alleged the company has targeted younger audiences through influencer campaigns. 

Washington joins other states taking action against Kalshi. Arizona recently filed criminal charges alleging the company operates without a license, while a Nevada judge issued a temporary ban earlier this month.  

Senators criticize prediction market insider trading restrictions 

At the same time, two federal senators have criticized new insider trading restrictions adopted by prediction market platforms Kalshi and Polymarket as insufficient.  

Sen. Adam Schiff and Sen. John Curtis said the companies’ self-imposed rules do not fully address concerns around market integrity. Kalshi said it would block politicians, athletes, and other relevant individuals from betting on events in which they have direct involvement, while Polymarket introduced similar measures to prevent insider trading and manipulation. 

The announcements came as Schiff and Curtis introduced the Prediction Markets are Gambling Act, which would give states authority over sports betting and casino-style gaming and prohibit federally regulated entities from offering such contracts. 

Sen. Schiff said voluntary policies in prediction market apps won't work without enforcement mechanisms, while Sen. Curtis raised concerns about the risks of betting on amateur athletes. Both senators also expressed concern about insider trading, citing reports of large bets on geopolitical events that proved correct. 

However, Kalshi has spoken out about the bill, saying it would only push people to unregulated sites.