Washington state is emerging as a key battleground in the national fight over whether federal commodities oversight allows prediction markets like Kalshi to override state gambling laws.
King County Superior Court Judge John McHale in Seattle sided with Washington Attorney General Nick Brown on July 20, granting a preliminary injunction and rejecting Kalshi’s core defense: that oversight by the U.S. Commodity Futures Trading Commission preempts state gambling law.
A check of the docket shows the case has escalated significantly since then. Kalshi has appealed to the Washington Court of Appeals, and asked McHale to pause his injunction pending that appeal.
Court records also indicate that former U.S. Acting Solicitor General Neal Katyal, Kalshi’s lead national counsel in similar state cases, is now representing the company in the Washington state case. The involvement of a lawyer with years of experience arguing before the U.S. Supreme Court signals that Kalshi is preparing for a serious appellate fight over federal preemption rules.
McHale has yet to rule on Kalshi’s stay motion or enter the operational terms of his injunction, which means the platform is still operational in the state nearly three weeks after his ruling.
Both sides have been pushing to shape McHale’s decision, submitting federal court rulings from other states for his consideration.
- In its filings, Kalshi has cited a July 27 Minnesota federal court order that blocked that state from enforcing a similar prediction-market ban.
- Washington countered on Aug. 5 by pointing out a Utah federal ruling against Kalshi, then followed on Aug. 7 with a Michigan federal ruling against Coinbase Financial Markets, which is trying to run its own prediction market.
McHale’s next ruling, expected in the coming days, should determine whether Kalshi will have to stop operating in Washington state while its appeal plays out.
