Washington Court Restricts Kalshi Contracts as Federal Regulator Keeps Platform Open

Prediction market Kalshi must remain operational under federal rules, even as a Washington state court has restricted most of its contracts for residents of the state. A King County Superior Court granted a preliminary injunction after finding that Kalshi likely breached Washington’s gambling and consumer-protection laws. The company must block Washington users from contracts linked to sports, elections, politics, entertainment, culture, technology and science. It must introduce IP- and residency-based restrictions by 19 August, followed by a broader verification system by 2 September. Commodity, climate, economic and financial contracts may still be offered in Washington, while existing users can close their positions. Separately, the US commodities regulator directed Kalshi to continue normal operations after the company reported a market emergency connected to litigation in New York. The conflicting actions highlight a growing legal dispute over whether prediction markets are federally regulated derivatives products or forms of gambling subject to state laws.

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