Washington Judge Orders Kalshi to Halt Certain Operations as Platform Mulls $40B Valuation

A King County Superior Court judge has issued a final order forcing Kalshi to shut down a large portion of its business in Washington after finding the company likely broke both the state's gambling law and its consumer protection law. 

The ruling bars Kalshi from offering or facilitating bets on sports, elections, politics, entertainment, culture, technology, science, and public figures, as well as "mentions" of Washington residents. The company must also implement an IP- and residency-based geofence by August 19, with a more advanced multi-source geofencing system required by September 2.

While the order does not affect every product Kalshi offers, it strikes at the core of the business, which has increasingly relied on sports wagering in recent years. Washington Attorney General Nick Brown said Kalshi built its wealth on wagers tied to sports, elections, and other unpredictable events, and that the order now blocks most of that activity within state lines.

The decision builds on a preliminary injunction the court granted in July, when the judge concluded that Washington consumers would face real harm if Kalshi continued operating without restriction. Kalshi later asked the state's Court of Appeals to pause the injunction, but the court denied the request.

The court also found that Kalshi's marketing crossed into deceptive territory, citing ads that encouraged residents to circumvent local betting restrictions by using the platform. Officials say this messaging suggested the company understood it was operating in a legal gray area. 

Kalshi has not filed a public response to the Washington ruling.

Kalshi courts Wall Street

Even as state regulators clamp down, Kalshi is drawing fresh interest from major investors. The company is reportedly in advanced talks with Sequoia Capital and Wellington Management for a funding round of at least $750 million, valuing the platform at $40 billion, according to a report from The Information.

Sequoia already holds a stake in Kalshi and has a seat on its board, while a deal with Wellington would mark the asset manager's first investment in the company. Wellington has a history of backing firms ahead of public offerings, and Kalshi's chief executive said in June that the company is weighing a possible IPO in 2027.

The new figure would nearly double Kalshi's $22 billion valuation in May, after it raised $1 billion. The company's annualized revenue has since climbed to roughly $4 billion, driven largely by 2026 World Cup betting activity, and it now claims a 95% share of the US prediction market apps market by revenue. 

Sports contracts account for more than 80% of Kalshi's trading volume. Kalshi also announced this week that Jeff Bandman, who helped the company receive approval by the Commodity Futures Trading Commission in 2020, is rejoining as head of its Kalshi Prime unit. 

Neither Kalshi, Sequoia, nor Wellington has confirmed the funding talks.