Washington Regulators Push Back on Prediction Markets as Election Betting Booms
18 September 2026
Court rulings and state officials are scaling back prediction markets at the same time platforms like Kalshi and Polymarket are aggressively expanding election-related betting.
This battle lines up regulators and lawmakers against the small but fast-growing prediction market sector. Federal and state courts are determining how to classify the young market, which exists in a legal gray area. Many U.S. states have held that prediction markets are illegal gambling, but some have allowed platforms to offer betting on a limited set of topics.
The Washington State Gambling Commission said in 2024 that offering or participating in prediction markets is not authorized in the state. The commission cautions that the "future of prediction markets, including those for sports and political events, remains subject to ongoing litigation in federal and other state courts".
A King County Superior Court judge agreed, this past August imposing an order demanding that Kalshi discontinue its contracts in Washington on sports, elections, politics, entertainment, culture, tech/science (including climate and medicine), and "mentions" (celebrity gossip & entertainment). However, the judge also allowed Kalshi to keep offering its markets on commodities, climate, economics, and finance.
This leaves Kalshi and other prediction market platforms in an ambiguous position in Washington and many other states.
Appeals and legislation
The Washington State Gambling Commission's position reflects a broader push in various U.S. states to treat prediction markets as a form of unlicensed, unregulated gambling, most commonly in light of election betting.
In fact, many states already ban betting on elections. The AP reported that over half the states have election betting laws on the books. The state push includes the Washington state order against Kalshi.
Washington regulators' concern is informed by the possibility of election manipulation. As Reuters noted, researchers have found prediction markets vulnerable to "significant manipulation by trading even 1% of available liquidity." The risk to election integrity is clear.
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Washington hosts only a corner of the prediction market explosion, and lawmakers are taking notice. This year the California-based STOP Corrupt Bets Act was introduced in Congress, seeking to ban contracting on elections, government actions, sports (such as who wins a championship or player of the year) and military activities. Sources in Congress are weighing the legislative path forward for election gambling.
So where are things at in Washington for prediction markets?
As of late 2024, Washington's Polymarket hosts 500 active markets; Kalshi has a governor market; and both platforms continue to offer betting across a wider set of topics. The court order against Kalshi was instantly challenged and remains in federal court. In a twist, California itself has no laws against prediction markets.
Washington state's regulator makes clear that only markets on commodities, climate, economics, and finance are currently permitted in Washington. The commission has not published the full scope of market offerings that fall within that description.
This stands in sharp contrast to the rapidly growing political sports and election markets in Washington. Kalshi continues to tout its Washington operational capability, including a governor bet.
The core question is whether these markets are useful tools for forecasting or an illegal gambling operation threatening election integrity and public confidence.