A judge in Washington state has ordered Kalshi to block users from a wide range of markets, including sports, by August 19. With the CFTC firmly opposing state court orders, it remains to be seen whether the company will implement the restrictions in Washington.
In addition to its sports markets, Kalshi must block users in the state from accessing its elections, politics, entertainment, culture, tech, science, or mention markets.
“By no later than August 19, 2026 Kalshi will implement IP address and residency based geofencing, and by no later than September 2, 2026, Kalshi will implement a multi-source geofencing solution provided through GeoComply,” stated Judge John McHale in the order.
Washington Becomes Third State to Block Kalshi
Kalshi is already facing similar restrictions in Nevada and Michigan. Judge McHale ruled last month that the company is operating an illegal online betting platform when granting the state a preliminary injunction.
In the latest court order, Judge McHale reiterated his stance, stating, “The State has shown a likelihood that Kalshi’s conduct violates multiple provisions of the Washington Gambling Act”.
Washington Attorney General Nick Brown, who filed the original lawsuit against Kalshi in March, celebrated the order as upholding the rule of law.
“Kalshi has gotten rich promoting wagers on sports, elections, natural disasters, events related to the Iran War, and more. Under this order, Kalshi is banned from offering wagers on most of those topics in Washington,” said Brown in a press release. “As this case moves forward, we will continue to enforce Washington law and hold Kalshi accountable for misleading consumers.”
The press release referenced a Kalshi ad where one person texts another that they “found a way to bet on the NFL even though we live in Washington.” The order is due to take effect to prevent any wagering on the new NFL season.
CFTC Orders Kalshi to Defy Court Orders
While it is yet to respond to the court order in Washington, the CFTC has opposed court orders in Michigan and New York against Kalshi.
On Thursday, the agency filed an emergency order compelling Kalshi to disobey state court orders as “supplemental authority” in its lawsuit against New York.
New York has filed a lawsuit against Kalshi seeking $36 billion in damages after the Second Circuit denied the company an injunction. The state has not yet explicitly ordered Kalshi to block access in the same manner as the order in Washington.
The New York case marks the second time the CFTC has exercised its emergency authority in the last 30 days. Prior to this, it had not utilized this measure since 1980.
Last month, it ordered Kalshi not to follow a Michigan state court order compelling it to cancel certain previously executed trades involving Michigan residents.
“A state cannot force a DCM to violate its obligations, and federal law does not permit a DCM to discriminate against a state’s residents,” said Chairman Michael Selig.
The order in Washington did not go so far as to order Kalshi to cancel existing trades, but stated, “Kalshi will not prohibit users from exiting positions they already hold.”
Kalshi Caught in ‘Impossible Position’
In response to the CFTC’s order in Michigan, Kalshi said it was being put in an “impossible position,” where it had to choose between defying state orders or defying the CFTC.
“We are disappointed by this decision and believe it is unfair to Kalshi,” Robert DeNault, the company’s head of enforcement and legal counsel said in a statement on X.
We are disappointed by this decision and believe it is unfair to Kalshi. We already acted and unwound the trades, as the Michigan court order required us to do.
— robertjdenault (@robertjdenault) July 14, 2026
We are being put in an impossible position, looking to follow state court orders that may contradict our federal… https://t.co/M81qNaOzCY
Baltimore Sues Kalshi & Polymarket
The lawsuits continue to come against prediction markets. Baltimore filed a complaint against both Kalshi and Polymarket on Thursday, similarly alleging that the companies are running illegal gambling operations.
“These companies are running sportsbooks without licenses and betting that a new label will put them above the law,” said Baltimore Mayor Brandon M. Scott in a press release. “It won’t. Baltimore will not let multibillion-dollar companies put profits over people and harm our communities through illegal gambling.”
The city has been active in opposing gambling companies. It filed a lawsuit against DraftKings and FanDuel last year, claiming the companies are using deceptive and abusive practices to encourage problem gambling.
In March, the city also sued several sweepstakes casinos, alleging they are operating “illegal gambling enterprises” in violation of local consumer protection law.
Like the complaints against the sweepstakes casinos, the lawsuits against Kalshi and Polymarket seek “civil penalties, injunctive relief, restitution for affected consumers, disgorgement of ill-gotten profits, and other relief authorized by law.”
Maryland is already engaged in an ongoing legal battle with Kalshi. The company sued the Maryland Lottery and Gaming Control Commission (MLGCC) last year after it sent the operator a cease-and-desist letter. A judge denied Kalshi’s request for an injunction in August last year. Kalshi appealed the decision to the Fourth Circuit, which continues to deliberate on the case. The MLGCC agreed not to take enforcement action while the appeal remains pending.
