Washington state has filed a lawsuit against prediction market platform Kalshi, alleging it offers gambling products disguised as financial contracts.
The action follows a recent Nevada court order that forced Kalshi to halt offering sports, election and entertainment contracts in the state, signalling growing regulatory scrutiny.
Washington’s attorney general claims Kalshi’s products fall under state gambling laws, escalating a broader legal battle over how prediction markets should be classified.
The case adds to mounting pressure on the sector, with Nevada also securing a preliminary injunction against Coinbase’s prediction market offerings.
Regulators are increasingly challenging whether prediction markets operate as legitimate financial instruments or unlicensed betting platforms.
The outcome of these cases could shape the future of prediction markets in the US, particularly for platforms offering event-based contracts.
As legal risks rise, companies operating in this space may face tighter restrictions or be forced to adjust their business models to comply with state regulations.