Washington judge halts most Kalshi state contracts, orders geofencing
A Washington state court judge has ordered Kalshi to halt most event contracts for state residents, including sports, elections, politics, entertainment, and culture markets. The ruling requires GeoComply geofencing to block Washington users from accessing the suspended categories by September 2, while allowing certain financial contracts to continue. The order cites gambling violations and demands Kalshi impose its own restrictions before a third party can deploy more robust blocking technology by August 19.
Kalshi must now geofence Washington or accept voiding risk on open contracts there. Traders face a market where CFTC-regulated positions are valid in some states and unlawful in others. Each state loss multiplies parallel litigation costs and shrinks the addressable market. The platform built its expansion on federal registration that state courts increasingly treat as decorative where gambling law applies.
Polymarket holds identical CFTC registration and faces identical exposure. Washington becomes another state court to reject Kalshi's federal preemption defense. The Second Circuit appeal offers the only path to a uniform national rule, but that timeline stretches across months or years while district courts keep ruling.
Washington joins Utah, Wisconsin, and New York as states where courts have rejected Kalshi's federal preemption defense, leaving Minnesota as the only recent federal shield and deepening the geographic patchwork for CFTC-registered platforms.