Is Kalshi Gambling? A Washington Court Just Said Yes — the CFTC Says No

On August 13, 2026, a Washington state judge ordered Kalshi, a major prediction market, to block state residents from betting on sports, elections, and entertainment outcomes. The Judge found the company had been “willfully” running illegal gambling.

Two days earlier, the federal government had ordered Kalshi to keep operating anyway. Both orders are currently in effect. This is what happens when two governments genuinely disagree about where gambling ends and financial trading begins.

This case is a more useful case study than most because the dispute is being fought out explicitly, in writing, in real courts.

What is Kalshi

Kalshi lets users trade “Yes” or “No” contracts on whether a specific real-world event will happen. Contracts can include everything from Fed rate decisions to election results to sports outcomes. Each contract is priced between $0.01 and $0.9...