Kalshi is facing a new lawsuit at the state level as Washington’s authorities have accused the prediction market operator of breaching gambling laws with its offerings.

The Washington Attorney General’s complaint asserts that Kalshi violated the Washington Consumer Protection Act, Gambling Act, and Recovery of Money Lost at Gambling Act by allowing users to bet on various events via its website and app. According to AG Nick Brown, the structure of Kalshi’s operations closely resembles that of traditional sportsbooks, albeit labeled as a ‘prediction market’.

The definition of gambling according to Washington law states that it involves risking something of value on the outcome of a chance event. The AG’s announcement highlighted that each bet on Kalshi comes with a financial risk and a payout for winners.

In response, Kalshi is attempting to transfer the case to federal court, arguing that similar issues are currently in litigation in federal courts, and lamenting the lack of prior dialogue from Washington state.

Kalshi’s troubles do not end here; similar accusations have prompted other states to pursue legal actions against the platform.

Earlier this month, a judge in Nevada imposed a temporary restraining order against Kalshi, suggesting that state authorities have a strong chance of prevailing in their legal battle over whether the platform’s contracts infringe upon Nevada’s gambling regulations.

Judge Jason Woodbury sided with the Nevada Gaming Control Board motion, restricting Kalshi from operating in the state for two weeks.

Moreover, Arizona AG Kris Mayes recently announced criminal charges against the companies linked to Kalshi for conducting illegal gambling activities without the requisite licenses.

These issues arise as prediction markets are also under scrutiny by lawmakers for offering bets on military actions, raising concerns about potential insider trading in governmental contexts.