States vs. Kalshi: A Complete Map of Who Is Suing the Prediction Market Giant — and Why

Kalshi has built one of the fastest-growing trading platforms in the country, processing over $1 billion in volume on the Super Bowl alone. But behind the explosive growth is an equally explosive legal war. More than 30 active court cases now involve Kalshi and other prediction market operators, with state attorneys general, tribal governments, and criminal prosecutors all taking their shot. Washington state became the latest to sue in late March 2026, and its approach mirrors a strategy that states have started finding works: keep the fight in state court, where regulators have consistently won.

The States Currently Fighting Kalshi in Court

The legal map against Kalshi has expanded dramatically since early 2025, when the platform launched sports event contracts and immediately drew cease-and-desist orders from gaming regulators across the country. Here is where the most consequential state-initiated actions currently stand.

Massachusetts was the first state to go on offense, with AG Andrea Campbell filing a civil suit in Suffolk County Superior Court in September 2025. The court rejected Kalshi’s attempt to move the case to federal court and remanded it back, then issued a preliminary injunction in January 2026 barring Kalshi from offering sports contracts in the state. A Massachusetts Appeals Court later granted Kalshi a temporary emergency stay, so the company can still operate there while the appeal plays out — but the underlying state court ruling stands as Kalshi’s first courtroom loss.

Nevada followed a different path. The Nevada Gaming Control Board issued a cease-and-desist in March 2025, Kalshi initially won a federal injunction, but a federal judge reversed course in November 2025 and dissolved it. When Nevada filed a fresh civil enforcement action in February 2026, Kalshi tried again to remove it to federal court. On March 2, Judge Miranda Du sent both the Kalshi and Polymarket Nevada cases back to state court, rejecting the “complete preemption” argument. On March 21, a Nevada state court issued a 14-day temporary restraining order — the first time Kalshi has ever been ordered to cease operations in a state where it was actively running.

Arizona went further than any state yet, filing 20 criminal misdemeanor charges against Kalshi on March 17, 2026 — the first criminal charges ever brought against a prediction market in the United States. The charges cover specific bets, including a $30 NFL game wager and a $2 bet on Arizona’s 2026 governor’s race. And then Washington joined the fight.

Washington State’s Lawsuit Against Kalshi

Washington Attorney General Nick Brown filed a civil suit against Kalshi on March 28, 2026 in King County Superior Court, choosing state court from the outset — a deliberate strategic move. The complaint argues that Kalshi violates Washington’s Gambling Act and Consumer Protection Act by offering unlicensed wagering on sports, elections, entertainment, and a staggering range of other events, from the number of measles cases in a year to specific words said during a TV broadcast.

Washington banned online gambling in 2006, with the only legal carve-out being sports wagers placed on tribal lands. Brown’s complaint argues Kalshi’s activities are squarely illegal under that framework, regardless of how the company brands itself. The state even cited a Kalshi advertisement in which one user texts another that they “found a way to bet on the NFL even though we live in Washington” — evidence, the AG argued, that Kalshi knew it was circumventing state law. Brown did not mince words: “They claim to offer a financial product, but Kalshi is just a bookie with a fancy name.”

The lawsuit seeks to halt Kalshi’s Washington operations, recover money lost by state residents, and impose civil penalties. Washington also separately sued Robinhood, Kalshi’s partner platform, shortly after — and Robinhood responded by suing the state in federal court, claiming federal law preempts Washington’s gambling regulations.

Nevada’s Remand Strategy and Why States Are Copying It

The Nevada situation created what has become a blueprint for state regulators looking to fight Kalshi on favorable ground. When Kalshi won its early federal court victories in Nevada and New Jersey, it appeared the company’s “federal preemption” argument was on solid footing. But when courts began examining whether Kalshi could be removed from state court at all, the picture changed entirely.

Nevada’s federal judge ultimately found that Kalshi’s contracts do not “completely preempt” state law — meaning federal courts do not have automatic jurisdiction over state gambling enforcement actions targeting Kalshi. When the case went back to state court, Kalshi lost immediately: a temporary restraining order shut it down within days. Massachusetts saw nearly identical dynamics, with the case remanded back to state court before a judge ruled against Kalshi. The pattern is consistent enough that legal observers have noted it plainly: every state-court action against Kalshi has resulted in a win for state regulators. Washington, by filing directly in King County Superior Court, skipped the federal detour entirely and planted its case in the forum where states have never lost.

What They Are Actually Fighting Over

The core legal question in every one of these cases is the same: does the federal Commodity Exchange Act — the law that created the CFTC — preempt state gambling laws when it comes to event contracts traded on CFTC-regulated exchanges? Kalshi argues yes, emphatically. It is a federally designated contract market, regulated by the CFTC, and it contends that the federal regulatory framework gives it the right to operate nationwide under a single set of rules without needing individual state gambling licenses.

State regulators argue the opposite. They say Congress never intended for CFTC registration to function as a nationwide gambling license, and that states retain the constitutional authority — often called “police power” — to regulate betting within their borders. Courts siding with Kalshi, like the federal judge in Tennessee, have focused narrowly on whether its contracts meet the legal definition of “swaps” under federal law. Courts siding with states, like those in Maryland, Massachusetts, and Ohio, have taken a broader view of congressional intent and found that the CEA does not strip states of their gambling enforcement authority.

The Trump administration’s CFTC has come down squarely on Kalshi’s side, filing amicus briefs in multiple cases and even suing Connecticut, Arizona, and Illinois directly in April 2026 to block those states from enforcing gambling laws against prediction market platforms. That federal intervention has raised the political temperature considerably, though it has not changed the fact that state courts keep ruling against Kalshi.

What This Means for Prediction Market Bettors

If you are using Kalshi in a state that has filed suit or issued a cease-and-desist, the platform’s availability is genuinely uncertain. Nevada is the clearest example: Kalshi was fully operational there until March 2026, and then a court ordered it to stop. Massachusetts came within days of a similar geofencing order before an emergency appellate stay paused enforcement. Washington’s new lawsuit, filed directly in state court, could produce a similar result faster than cases that got tied up in federal removal fights.

For now, Kalshi remains accessible in most of the country. The company has won federal injunctions in New Jersey and Tennessee that have slowed enforcement there, and the Trump CFTC’s active legal support gives it significant political and institutional backing. But the states winning in state court — and the growing list of AGs willing to file suit — means the patchwork of Kalshi availability could expand quickly. Arizona has already shown that criminal charges are on the table. Washington filing in state court, Nevada with a TRO in place, Massachusetts with an active injunction on appeal: the legal pressure is building from multiple directions simultaneously, with circuit courts in the 9th and 4th Circuits set to issue potentially landmark rulings in 2026. The outcome of those appeals will likely determine whether this fight gets resolved in court or lands at the Supreme Court.