Sports and election markets are banned for Washington residents; economics, commodities, climate, and finance contracts are preserved. This is the first judicial ruling to divide a prediction market catalog by contract category.
Appeal stay denied by the Washington Court of Appeals. This order is in force while the underlying case proceeds. Washington AG press release
Judge John McHale of King County Superior Court signed the order on August 13, 2026, finding that Kalshi was likely violating Washington’s Gambling Act and Consumer Protection Act. The ruling is notable for what it did not ban: economics, commodities, climate, and finance contracts remained available — the first time a court has formally separated Kalshi’s catalog by contract category.
Confirm current availability at Kalshi’s official availability page before trading.
The ruling reflects how courts distinguish between two types of prediction market contracts when applying state gambling law. No appellate court has definitively settled the question, but the split gives a clear signal of the legal reasoning being applied.
Sports and election contracts closely resemble traditional wagering. Outcomes depend on results that no individual participant can predict with a systematic informational advantage, and they have direct overlap with state gaming law and electoral integrity statutes. Courts have found these categories most vulnerable to state regulation.
Economics and commodities contracts sit at the core of what the Commodity Exchange Act (CEA) was written to regulate: markets for price discovery and economic risk transfer. The federal preemption argument — that CFTC rules override state gambling law — is strongest for these products. The court did not include them in the prohibited categories.
Climate and weather contracts most closely resemble traditional commodity derivatives — instruments for hedging against real-world economic risk (crop losses, energy demand). Courts have historically treated physical commodity derivatives as within CFTC’s exclusive jurisdiction.
The court’s order did not rule that economics or climate contracts are legal under Washington law — it simply did not include them in the prohibited categories. The distinction may be tested in future litigation.
| Contract type | Status in Washington | Open positions |
|---|---|---|
| Sports markets | Unavailable | May be wound down per Kalshi policy |
| Election / politics markets | Unavailable | May be wound down per Kalshi policy |
| Entertainment / culture / tech / science / mentions | Unavailable | May be wound down per Kalshi policy |
| Economics / macro indicators | Available to trade | Not affected by order |
| Commodities markets | Available to trade | Not affected by order |
| Climate / weather markets | Available to trade | Not affected by order |
Confirm current availability at Kalshi.com. Status reflects court order as of August 13, 2026 and may change if the order is modified or overturned on appeal.
IP & residency geofence deadline: August 19, 2026
Kalshi must implement IP address and residency-based geofencing to block Washington residents from restricted categories.
Multi-source geofence deadline: September 2, 2026
By this date, Kalshi must have a multi-source geofencing system (GeoComply) in place. Non-compliance carries a $120,000/day penalty.
This is a preliminary injunction, not a final judgment. It reflects the court’s determination that Washington is likely to succeed on the merits — but a full trial will determine the final outcome.
Kalshi is appealing. The Washington Court of Appeals denied a stay, so the restrictions remain in effect during the appeal. Appeal path: Washington Court of Appeals → Washington Supreme Court, with potential federal court proceedings on the preemption question.
Kalshi’s central argument remains that the CFTC has exclusive jurisdiction under the Commodity Exchange Act, preempting state gambling law. King County Superior Court rejected this argument at the preliminary injunction stage. No federal appellate court has issued a definitive ruling on CEA preemption of state prediction market bans.
Similar state injunctions — in Nevada and Michigan — have remained in effect pending appeal. SCOTUS review is possible but requires the case to exhaust state appellate remedies or present a clear federal question.
No. This ruling specifically names KalshiEX LLC. Polymarket operates through QCX LLC — a separate CFTC-licensed designated contract market — and faces its own distinct litigation. The two cases are legally separate; a ruling against Kalshi does not bind Polymarket.
Washington residents using Polymarket should monitor QCX LLC’s own regulatory status separately. Polymarket’s availability in Washington is governed by its own agreements and any separate state enforcement actions.
The Washington ruling establishes a judicial template: a court can grant a partial injunction that preserves categories where CFTC preemption is strongest while restricting categories that overlap most directly with state gambling or electoral law. States with active prediction market enforcement cases may seek similar split orders.
States that have focused enforcement on sports and election contracts — Nevada, Michigan, Illinois — now have a judicial model for a partial ban that a court has already applied.
A split approach requires the state attorney general to argue, and the court to accept, that economics and commodities contracts are categorically different from sports contracts. This argument is stronger where CFTC has actively regulated the specific contract types.
For Kalshi, the silver lining is that the ruling implicitly signals that the financial data market may be on firmer legal ground in state courts than the sports business — even in states with aggressive gambling enforcement.
