Kalshi has cut off access for Washington residents as the company presses a King County judge to roll back parts of an injunction that has been choking its prediction markets. What happened - Kalshi filed a motion on Aug. 21 asking Judge John McHale to reconsider an amended preliminary injunction that forced the exchange to install IP- and residency-based blocks by Aug. 19 and put a broader GeoComply geofencing system—using multiple location sources—in place by Sept. 2. Kalshi told the court it has already blocked Washington users; the broader GeoComply requirement is still live, and the company could face a $120,000-per-day fine for missing the Sept. 2 deadline unless it files a sworn explanation for any delay. - The injunction covers a wide swath of Kalshi’s contracts—sports, elections, politics, entertainment, culture, technology, science and certain “mentions” markets—and leaves record-preservation requirements in place. Those restrictions remain active while the reconsideration request is pending. - Judge McHale is scheduled to decide on Kalshi’s motion on Sept. 2 without oral argument. Why Kalshi is asking for relief - Kalshi argues Washington granted competing exchange North American Derivatives Exchange (operating as OG) more favorable treatment under an Aug. 18 agreement between the state and OG. That deal says Washington won’t pursue civil or criminal enforcement against OG’s federally traded event contracts while related appeals are resolved. - Kalshi says that arrangement demonstrates inconsistent enforcement: the “very event contracts that the state deemed intolerable from Kalshi are now freely available” through OG, Kalshi contends. The company asks the court to vacate parts of the injunction or stay enforcement on terms comparable to OG’s deal. The court has not accepted Kalshi’s characterization, and the company’s “identically situated” claim remains a legal position rather than a finding. Regulatory fight in Washington and beyond - Washington Attorney General Nick Brown has argued that Kalshi’s products amount to unlicensed gambling. A Washington court previously rejected Kalshi’s jurisdictional arguments at the preliminary stage and found the state likely to win on some claims—though that’s not a final judgment on all issues. - Kalshi’s core defense is that event contracts listed by registered exchanges are federally regulated derivatives under the Commodity Exchange Act (CEA), meaning the Commodity Futures Trading Commission (CFTC) has exclusive authority and state gambling laws cannot control those markets. - Courts across the U.S. have split on that question. Washington joins Michigan and Nevada in restricting Kalshi; Kalshi has appealed or challenged those orders. By contrast, a federal judge blocked Minnesota’s prediction-market ban after finding registered exchanges were likely to succeed on part of the preemption argument. New York, Connecticut, Massachusetts, Ohio, Maryland, Utah and Arizona also have pending disputes over prediction-market authority. Outcomes are likely to hinge on contract type, statutory wording and where each case sits in the procedural timeline. Where the CFTC stands - CFTC Chairman Michael Selig said on Aug. 20 the agency will continue defending its claimed exclusive jurisdiction over federally regulated event contracts while also addressing retail protection concerns. The CFTC plans to propose amendments to Parts 38 and 40 of its regulations—expected to tackle consumer protections, product governance, market design, listing standards and incentive programs, and spell out how contracts tied to gaming, war, terrorism, assassination or illegal activity would be assessed. - Those proposals have not yet been published and still must move through the federal rulemaking process. They won’t automatically nullify state court orders or settle whether federal law displaces state gambling restrictions. What to watch next - The immediate milestones are Judge McHale’s Sept. 2 decision on Kalshi’s reconsideration request and the geofencing operational deadline. Until the court grants relief, Washington customers will remain barred from accessing the restricted Kalshi markets. Read more AI-generated news on: undefined/news