Scott Bright, a Bellevue, Washington resident, is suing prediction market Kalshi for $580,000 over sports betting losses totaling $308,781.62. Bright claims Kalshi violated Washington's ban on internet gambling, which has been in effect since 2006.
Between June 17 and August 14, 2026, Bright transferred $315,353.94 to Kalshi across 253 separate transactions and placed wagers on sporting events including professional baseball and tennis matches. Kalshi collected $84,062.71 in trading fees on $14,396,457.30 in total transaction volume, according to Bright's lawsuit filed September 24 in King County Superior Court.
Bright invokes Washington's Recovery of Money Lost at Gambling Act to seek restitution. He calculates his requested damages at $580,544.98 using an event-by-event method derived from a 1950 Washington Supreme Court ruling that bars offsetting winnings against losses. If that fails, Bright asks the court to award all transferred funds plus fees collected by Kalshi, totaling over $405,000.
Kalshi filed a motion to dismiss on October 30, arguing the contracts at issue are "event contracts" regulated by the federal Commodity Futures Trading Commission under the Commodity Exchange Act, not gambling. Kalshi characterizes itself as a neutral exchange platform collecting transaction fees, with losses going to counterparties rather than the company itself. Kalshi also runs a trading affiliate that provides liquidity on the platform.
Bright's lawsuit alleges Kalshi's affiliate took the opposite side of a substantial portion of his positions, making Kalshi a dealer or player rather than a neutral venue. However, Bright acknowledges he cannot confirm this without access to information exclusively held by Kalshi.
A Ninth Circuit appeals court ruled in August that Nevada can regulate Kalshi under gambling laws, finding that "placing sports bets, even when called by another name, is still gambling." That court's jurisdiction includes Washington. Kalshi has moved to stay Bright's case pending potential US Supreme Court review of whether states can regulate prediction markets.
Washington's attorney general has separately sued Kalshi in King County Superior Court and won a preliminary injunction in August requiring geofencing and restrictions on certain wager types in the state.