Overview
Washington’s Attorney General sued Kalshi (March 2026) for operating an unlicensed online gambling business despite its federal registration. Kalshi removed the case to federal court; Judge John Coughenour (W.D. Wash.) remanded it to state court (May 2026), finding the complaint enforced state gambling law rather than raising federal jurisdiction, and the Ninth Circuit declined to pause the remand. Back in King County, Judge John F. McHale granted the state an amended and updated preliminary injunction (August 2026), rejecting Kalshi’s preemption defense. The order bars event contracts related to sports, elections, politics, entertainment, culture, tech and science, and “mentions” — expressly naming the corresponding tabs on Kalshi’s platform — while stating it does not reach commodities, climate, economics and finance. It requires IP/residency geofencing by August 19, 2026 and a multi-source GeoComply solution by September 2, 2026, and expressly permits users to exit positions they already hold. If implementation is incomplete after September 2, Kalshi must either pay the State $120,000 per day until it is complete or file a sworn affidavit explaining why, after which the court may set penalties if it finds Kalshi failed to act with sufficient diligence. The court concluded Kalshi’s provision, marketing and advertising of illegal gambling constitute unfair and/or deceptive acts under RCW 19.86.020, and required no bond from the State. Press has described this as a “final order”; the order itself grants an amended motion for a preliminary injunction, so it is not a merits judgment. (Order read directly: “Amended and Updated Order Granting Plaintiff State of Washington’s Amended Motion for Preliminary Injunction,” King County Superior Court No. 26-2-10264-3 SEA. Caption also confirmed via the federal removal docket, W.D. Wash. No. 2:26-cv-01062.)