Washington sues Kalshi as states ramp up legal pressure against prediction markets

Washington state’s attorney general filed a lawsuit against Kalshi, claiming the company offers gambling products disguised as prediction markets, violating state gambling laws. The state argues Kalshi’s platform functions like a sportsbook, allowing bets on events with payouts based on odds, despite being marketed as a “prediction market.” The lawsuit also alleges Kalshi promotes gambling addiction and targets college students. Kalshi has moved the case to federal court, citing existing litigation and a lack of prior warning from Washington. This action follows a recent Nevada appeals court victory allowing it to temporarily restrain Kalshi from operating in the state, and a similar injunction against Coinbase for its prediction market offerings. The core legal debate centers on whether these platforms are regulated derivatives contracts (as Kalshi and the CFTC argue) or illegal gambling operations subject to state laws, a dispute likely headed for the Supreme Court.

(Source：CoinDesk)