Kalshi Ordered to Geofence Washington Bets by Sept. 2 as Tribes Push for Supreme Court Review

A Washington state judge has ordered Kalshi to shut down most of its sports and event-contract trading in the state by September 2, dealing another courtroom loss to the prediction market operator and fueling tribal gaming leaders’ hopes that the U.S. Supreme Court will soon settle the legal fight once and for all.

King County Superior Court Judge John McHale issued the order on August 13, finding that Kalshi is likely violating Washington’s gambling laws by offering event contracts on sports, elections, politics, entertainment, culture, tech, science, and “mentions” markets. The company must implement IP address and residency-based geofencing by August 19, followed by a more sophisticated multi-source geofencing system by September 2. Contracts tied to commodities, climate, economics, and finance are not affected by the order.

Kalshi denied a stay, faces steep daily fines

Kalshi immediately asked the Washington Court of Appeals to pause the injunction while it appeals, but the court denied that request. If the company misses the September 2 deadline, it faces fines of $120,000 per day, though it can submit an affidavit explaining any delay for the court to consider. McHale wrote that Kalshi “willfully ignored” a December 2025 notice from the Washington State Gambling Commission stating that event-based contracts were not authorized in the state, and concluded that the public interest in protecting consumers outweighed any harm to Kalshi from the order.

“Kalshi is regulated by the CFTC (Commodity Futures Trading Commission), which has exclusive jurisdiction over our exchange,” Jackie McGavick, a spokeswoman for Kalshi, told CDC Gaming in an email. “We respectfully disagree with the court’s decision and are considering all legal options.” The order is part of a preliminary injunction the court first granted in July, and the underlying case is still moving toward trial. Washington is now one of at least three states, alongside Michigan and Nevada, where judges have ordered Kalshi to geofence its sports-related offerings.

Tribal leaders see momentum building toward the Supreme Court

The ruling landed as a win for the Indian Gaming Association, which represents tribes that argue prediction markets offering sports wagers threaten both tribal economies and tribal sovereignty. Washington is home to 23 federally recognized tribes operating 29 casinos. Jason Giles, executive director of the IGA, called the decision “another victory” in a string of recent wins for tribal gaming interests, including a federal judge’s ruling that Utah can enforce its own anti-gambling laws against Kalshi.

“I think it should give some impetus for the U.S. Supreme Court to weigh in sooner rather than later,” Giles said. He added that Congress also has a role to play in addressing the argument that sports-related event contracts should be treated as financial swaps rather than wagers, and said lawmakers should hold oversight hearings on the CFTC’s posture toward prediction markets.

IGA Chairman David Bean was more pointed in his criticism, accusing CFTC Chairman Michael Selig of “prepping the industry for the Supreme Court” rather than reining in an unregulated product. Bean argued during a recent IGA webinar that the dispute also implicates the Indian Gaming Regulatory Act, which gives states a say over tribal gaming within their borders. “We are dealing with a captive regulatory agency in the CFTC,” Bean said. “When have you seen an agency advocate on behalf of the people they are supposed to regulate.”

New Jersey case could be the vehicle to the high court

Giles confirmed the IGA has filed a petition asking the Supreme Court to take up New Jersey’s case against Kalshi, after a divided Third Circuit Court of Appeals ruled in April that federal commodities law preempts state gaming bans on the company’s sports event contracts. Justice Samuel Alito has already extended New Jersey’s deadline to file a formal petition for certiorari to September 3, though it remains unclear whether the state has done so yet.

Kalshi is simultaneously fighting battles on other fronts. The CFTC recently filed an emergency declaration allowing the company to keep operating in New York despite a lawsuit from state Attorney General Letitia James seeking $36 billion in damages over allegedly illegal sports wagers. With circuit courts and state courts reaching different conclusions on whether prediction markets can offer sports contracts, tribal leaders believe a Supreme Court review is close to inevitable. As Bean put it, “This is a problem. This is illegal. This is gambling.”

The outcome could reshape how prediction markets operate legally across the country, especially as more states weigh in on whether platforms like Kalshi need to follow the same rules as licensed sportsbooks. For bettors trying to make sense of the current landscape, it’s worth understanding how prediction markets differ from sports betting before deciding where to place a wager while the legal fight plays out.