Man sues Kalshi over $308,000 sports betting losses
The gist
A man who lost $308,000 on sports bets sued Kalshi, seeking his money back under Washington's betting ban.
The suit adds to a widening state-by-state fight over whether Kalshi's contracts are gambling.
How it unfolded
- Jan 2025According to the lawsuit, Kalshi began offering sports-related contracts, later expanding into individual player performances, point spreads, game totals and combinations of sporting outcomes.
- Apr 2026The Third Circuit ruled New Jersey cannot regulate sports bets on prediction markets, finding Kalshi's sports-related event contracts are swaps traded on a CFTC-licensed DCM (designated contract market), so the CFTC has exclusive jurisdiction.
- Aug 2026A three-judge Ninth Circuit panel unanimously ruled Nevada can stop Kalshi from allowing sports bets, finding those bets are not swaps and may be regulated under state gambling laws.
Key terms
- prediction market
- Open markets where people trade bets on the outcomes of future events, using financial incentives to forecast probabilities.
- swaps
- A financial derivative in which two parties agree to exchange streams of cash flows based on an agreed formula.
Source: Wikipedia