Kalshi Must GeoFence Washington From Sports Event Contracts By September

• A King County Superior Court Judge issued a final order requiring Kalshi to prohibit certain event contracts in the state of Washington
• The order requires Kalshi to implement an IP address and residency based geofence in the state by Aug. 19
• The judge previously granted Washington a preliminary injunction against Kalshi

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A King County Superior Court judge is giving Kalshi until early September to fully implement a geofence in Washington to prohibit certain event contracts.

King County Superior Court Judge John F. McHale issued a final order that the prediction market operator must implement an IP address and residency based geofence in the state by Aug. 19, and a multi-source geofencing solution by Sept. 2, to prohibit sports, elections, politics, entertainment, culture, tech and science, or mentions event contracts in Washington.

If Kalshi does not have a multi-source geofencing solution in place by Sept. 2, the state can fine the prediction market operator $120,000 a day until it does so.

Ceasing Sports Event Contracts, Marketing

The State of Washington recently secured a preliminary injunction against Kalshi after Washington Attorney General Nick Brown filed a lawsuit this past March.

Judge McHale declared the state has shown a “likelihood of success on the merits” of its claims that portions of Kalshi’s event contract offerings, including sports event contracts, violates aspects of the Washington Gambling Act. When issued, the preliminary injunction will temporarily bar Kalshi from offering its sports event contracts in Washington.

The latest order sets a date for geofencing and also prohibits Kalshi from marketing, advertising, promoting, or offering the markets in Washington.

“Kalshi shall cease marketing, advertising, promoting, conducting, operating, facilitating, distributing, offering, or accepting event contracts, or other contracts, instruments, or products in Washington, related to sports, elections, politics, entertainment, culture, tech and science, or mentions, including but not limited to those listed in the ‘Sports,’ ‘Elections,’ ‘Politics,’ ‘Culture,’ ‘Tech and Science,’ and ‘Mentions’ tabs on Defendant’s platform,” McHale wrote in his order.

Kalshi will still be permitted to offer event contracts regarding commodities, climate, economics, and finance.

“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,” Attorney General Brown said in a press release. “As this case moves forward, we will continue to enforce Washington law and hold Kalshi accountable for misleading consumers.”

Lawsuit Alleges Kalshi Violates State Gambling Laws

Attorney General Brown previously filed the lawsuit in the State of Washington King County Superior Court, alleging Kalshi is in direct violation of the state’s prohibition of online gambling. While online sports betting is allowed in Washington, it is only allowed on tribal casino property and strictly prohibited off tribal land.

Brown notes in the lawsuit that Kalshi’s gambling operations “violate numerous provisions of Washington’s Gambling Act, as well as the Consumer Protection Act and the Recovery of Money Lost at Gambling Act.”

“In direct violation of this prohibition and public policy, Kalshi operates its online betting market nationwide, including in Washington and other states that prohibit online gambling. In its advertising and marketing, Kalshi specifically promotes illegal online sports gambling in Washington state,” Brown reported in the lawsuit.

Additionally, Brown said Kalshi has marketed itself to young people between the ages of 18 and 21, coaxing college students to their platform by routinely paying influencers to promote their gambling app to their peers.

The lawsuit seeks a permanent injunction from Kalshi’s alleged unlawful conduct in the state, restitution for consumers of money or property unlawfully acquired by Kalshi, and the court assess civil penalties for every violation of the Consumer Protection Act.