Prediction market operator Kalshi is asking a King County Superior Court judge to reconsider an injunction restricting its operations in Washington.
Prediction market operator Kalshi is asking a King County Superior Court judge to reconsider an injunction restricting its operations in Washington, arguing the state has agreed not to enforce the same laws against a competing federally regulated exchange.
KalshiEX LLC filed the motion Thursday, seeking reconsideration of an amended preliminary injunction entered last week by Judge John F. McHale.
Alternatively, the company is asking the court to reconsider its denial of a stay. A hearing is scheduled for Sept. 2 without oral argument.
The motion centers on an Aug. 18 agreement involving North American Derivatives Exchange Inc., doing business as OG. Kalshi says OG, like Kalshi, is a designated contract market licensed by the Commodity Futures Trading Commission and offers event contracts to consumers in Washington.
According to the filing, the Washington Attorney General and state Gambling Commission defendants agreed not to pursue civil or criminal enforcement actions against OG involving event contracts traded on a designated contract market until the 9th U.S. Circuit Court of Appeals resolves pending appeals involving the same federal preemption issues.
Kalshi argues the agreement represents new evidence that undermines the state's position that its continued operation causes immediate and substantial harm to Washington consumers.
The state filed its case against Kalshi on March 27, alleging violations of the Consumer Protection Act and the Recovery of Money Lost at Gambling Act based on its contention that Kalshi's federally regulated event contracts constitute illegal gambling under Washington law.
Under the amended preliminary injunction, Kalshi was required to implement IP address- and residency-based geofencing by Aug. 19.
It must implement a multi-source GeoComply system to block purchases by Washington consumers by Sept. 2, or pay $120,000 for each day it fails to comply, unless it submits a sworn explanation for the delay.
The injunction also bars Kalshi from offering contracts related to sports, elections, politics, entertainment, culture, technology and science, or "mentions," according to the filing.
Kalshi argues it is already blocking Washington traders while OG can continue serving those consumers under the state's non-enforcement agreement.
The company contends the disparity could cause customers to move to competitors and result in losses of goodwill and market access.
Kalshi is asking McHale to vacate portions of the preliminary injunction or stay its operative provisions under terms similar to those provided to OG while appellate proceedings continue.
Kalshi said it is not seeking relief from requirements that it preserve records.
