“Kalshi wants people betting on almost everything possible in life,” Brown said in a press release. “For Kalshi, every event, every tragedy is nothing more than a potential way for Americans to risk their fortunes.”
Washington Attorney General Nick Brown has filed a lawsuit against Kalshi, claiming that the company operates an illegal gambling service that lets its users bet on sports, elections, and other real-world events.
According to KOMO News, the lawsuit accuses Kalshi of violating the state’s Gambling Act and Consumer Protection Act by permitting wagers on sports games, political races, public health data, and even court proceedings.
Brown’s office is asking the court to issue an order prohibiting Kalshi from continuing to engage in such activities in the state of Washington.
Kalshi, notes KOMO News, describes its service as a “prediction market.”
However, the attorney general claims that the most common use of the so-called prediction market meets the state’ definition of gambling: risking money or something else of value on the outcome of a contest of chance or a yet-undetermined future event.
Kalshi users typically place money on outcomes and receive payouts based on odds, just like traditional sportsbooks.
“Kalshi wants people betting on almost everything possible in life,” Brown said in a press release. “For Kalshi, every event, every tragedy is nothing more than a potential way for Americans to risk their fortunes.”
Brown says that Kalshi offers common sports wagers, including point spreads, over-under bets, and proposition bets, all of which are allegedly illegal to conduct online in Washington.
“Kalshi’s website and app show consumers a range of events that they can bet on and the odds for those various events, which dictate how much the bettor will be paid out if the event occurs. This is exactly how sportsbooks and other gambling operations function,” Brown’s office siad in a press release. “Kalshi advertises that they allow consumers to “bet on anything” by simply calling their service a “prediction market” rather than “gambling.” In one Kalshi advertisement, one person texts another that they “found a way to bet on the NFL even though we live in Washington,” which seems to acknowledge that Kalshi knows that they are attempting to skirt state law. In fact, Kalshi did find a way to bet on the NFL in Washington; all they had to do was break the law.”
Brown’s office notes that Washington’s constitution has prohibited gambling on state lands since 1889. In 2006, lawmakers updated a gambling-control law to clarify that online betting is illegal, too.
Brown says that, as part of its marketing strategy, Kalshi and companies like it tend to target young adults, including college students. Kalshi, for instance, allegedly advertised that “College campuses…will play a key role in bringing the next 100M users” to their product. The company purportedly pays student influencers to promote the Kalshi app to their peers; at one point, it even tried to recruit a 15-year-old influencer.
Sources
Washington AG alleges Kalshi is in ‘direct violation’ of state gambling laws in lawsuit
Washington AG sues Kalshi, alleging illegal online gambling and consumer law violations
Washington sues online betting platform Kalshi for illegal gambling
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