A Washington state court issued a preliminary injunction against Kalshi after finding that its sports-related event contracts constitute illegal gambling under state law, gaming attorney Daniel Wallach said July 20. The ruling makes state gambling classification the immediate barrier to Kalshi’s Washington operations, rather than treating the contracts solely as federally regulated derivatives.
BREAKING: Washington state court issues preliminary injunction against Kalshi, finds that the company conducts illegal gambling activities in violation of Washington State gambling laws and that the Commodity Exchange Act does not preempt state gambling laws. pic.twitter.com/pwJeDmYbD5
— Daniel Wallach (@WALLACHLEGAL) July 21, 2026
The order blocks Kalshi from offering sports-related contracts to Washington residents while the case proceeds. Kalshi has argued that the federal Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive authority over its markets, but the court’s injunction reflects a state-level rejection of that preemption position at the preliminary stage.
The dispute is not over. A preliminary injunction preserves restrictions during litigation and does not represent a final judgment on every claim. The next checkpoint is whether Kalshi secures a stay or succeeds on appeal, because the practical impact now depends on whether the Washington restriction remains enforceable through the next phase.
Source: Daniel Wallach’s official X account.
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