Washington Attorney General Nick Brown sued Kalshi in state court on Friday, the latest example of a state being more aggressive in trying to get prediction markets to stop offering sports event contracts in its jurisdiction.
The strategic shift from defense to offense is the real story. When states were sending cease-and-desists and Kalshi was suing first, Kalshi got to choose the forum and frame the preemption argument on its terms. States filing first in their own courts flips the procedural leverage — now Kalshi has to argue federal preemption as a defense rather than as a sword. Worth noting that Washington's statutory definition of gambling ("staking something of value upon a future contingent event") would technically cover half of what happens on the CME. The distinction between a "prediction market" and a "futures exchange" has always been more about who your regulator is than what you're actually doing.
The strategic shift from defense to offense is the real story. When states were sending cease-and-desists and Kalshi was suing first, Kalshi got to choose the forum and frame the preemption argument on its terms. States filing first in their own courts flips the procedural leverage — now Kalshi has to argue federal preemption as a defense rather than as a sword. Worth noting that Washington's statutory definition of gambling ("staking something of value upon a future contingent event") would technically cover half of what happens on the CME. The distinction between a "prediction market" and a "futures exchange" has always been more about who your regulator is than what you're actually doing.