Judge Blocks Kalshi Markets in Washington, Rejecting Federal Preemption Defense

Woofun AI reports that King County Superior Court Judge John McHale issued an injunction barring Kalshi from operating specific prediction markets in Washington, decisively rejecting the platform's defense that the Commodity Exchange Act preempts state gambling regulations. The ruling establishes that the Commodity Futures Trading Commission does not hold exclusive jurisdiction over these contracts, contrary to Kalshi's legal stance.

Structurally, the court delineated a sharp boundary between prohibited and exempt contract categories. Kalshi is barred from offering instruments tied to sports, elections, politics, entertainment, culture, tech, science, and 'mentions.' Conversely, contracts involving commodities, climate, economics, and finance remain exempt from this restriction, preserving those specific trading verticals.

Per Woofun AI, the enforcement timeline imposes strict technical mandates on the platform. Kalshi must deploy IP-address and residency-based geofencing by Aug. 19, followed by a GeoComply multi-source geofencing system by Sept. 2. Washington Attorney General Nick Brown cited these measures as necessary to prevent state residents from accessing the banned contracts.

The amended order, signed Wednesday, formalizes the preliminary injunction originally granted in July. With the Washington Court of Appeals denying the request to stay the injunction, Kalshi faces immediate compliance obligations without procedural relief.