Washington Attorney General Nick Brown has filed a lawsuit against Kalshi, alleging the online platform violated state law by offering unlawful gambling products to consumers in Washington.
The complaint argues that Kalshi's event contracts fall within the state's definition of gambling because users risk money on the outcome of contests of chance or future contingent events in return for a potential payout. Washington said the platform's conduct breached both the Washington state Gambling Act and the Consumer Protection Act.
According to the attorney general's office, Kalshi offered contracts on sports, elections and a range of other events through its website and app.
The filing said those products included spread bets, over-under bets and proposition bets on college and professional sports, all of which are commonly associated with sportsbooks and casinos and are prohibited online in Washington.
Brown said: "Kalshi may brand itself as a 'prediction market,' but what it's actually doing is running an illegal gambling operation."
The state also pointed to Kalshi advertising that referred to users being able to "bet on anything" and cited one ad in which a person texts that they had "found a way to bet on the NFL even though we live in Washington."
The lawsuit said this suggested the platform understood the state's restrictions on internet gambling.
Washington said online gambling has been prohibited under state law since lawmakers amended the 1973 Gambling Act in 2006 to make that position explicit. The complaint also said Kalshi's products created added consumer risk because they were available online and were marketed toward younger users.
State prosecutors alleged Kalshi promoted its app to consumers aged 18 to 21, paid student influencers to market the product on college campuses and at one stage sought to recruit a 15-year-old influencer.
The lawsuit seeks an order stopping Kalshi from operating in Washington, restitution for consumers who lost money on the platform and civil penalties.
Washington's filing follows other state-level challenges to Kalshi's business model. Earlier this month, Arizona filed 20 misdemeanor charges accusing the platform of running an illegal gambling business and accepting wagers on sports and election outcomes, marking the first criminal case brought by a state against Kalshi.
Washington's lawsuit also cites contracts tied to measles cases, witness testimony in a child trafficking hearing and possible outcomes in the Iran war
