A judge in Seattle issued a preliminary injunction against Kalshi, finding that Washington state is likely to prove that the fast-growing prediction market is running illegal online gambling.

The ruling by King County Superior Court Judge John McHale, issued Monday, does not immediately halt Kalshi’s operations in the state. McHale granted the injunction in the case brought by Washington AG Nick Brown, but deferred the specifics until early next month.

McHale rejected Kalshi’s argument that oversight by the U.S. Commodity Futures Trading Commission preempts state gambling laws. That has been the basis of Kalshi’s defense against regulators across the country. Washington is the latest state where a court has shot it down.

Kalshi quickly pushed back on the ruling.

“States don’t have jurisdiction to regulate prediction markets. Many courts — including the Third Circuit — have made this clear,” spokesperson Jacki McGavick said in a statement. “We’re disappointed to see Washington State continue wasting taxpayer dollars.”

In his ruling, McHale said Kalshi “willfully ignored” a December 2025 notice from the Washington State Gambling Commission that event-based contracts were not authorized in the state, and cited a Kalshi ad showing a text exchange where one user tells another: “I found a way to bet on the NFL even though we live in Washington.”

Kalshi’s platform lets users bet “yes” or “no” on thousands of events across sports, elections, entertainment, and so-called “mention markets” — wagers on whether public figures will say specific words. The New York-based company, which markets itself as a federally regulated “prediction market,” takes a transaction fee on each bet.

Washington has some of the strictest gambling laws in the country: the legislature banned internet gambling in 2006, and while the state allows a lottery, horse racing, and tribal-casino gambling, online betting is broadly prohibited and sports wagers are legal only in person on tribal lands.

The order requires Kalshi to preserve all records tied to Washington users, including logs, communications, geolocation data and marketing materials.

The specific operational terms of the injunction are still being determined: McHale gave both sides until Aug. 3 to submit proposed language, with a full order to follow by Aug. 5.

This story originally appeared on Real Estate News.

A federal court has turned down the Federal Trade Commission’s request to declare a rentals deal between Zillow and Redfin “presumptively unlawful” before trial next month.

On Wednesday, July 8, Judge Anthony J. Trenga of the U.S. District Court for the Eastern District of Virginia denied the FTC’s motion for partial summary judgment in its case alleging Zillow and Redfin violated antitrust laws when Zillow paid $100 million to become Redfin’s exclusive multifamily rental listings provider in early 2025.

After a hearing Wednesday morning, Trenga said he found “genuine disputes of material fact” regarding the FTC’s ask.

Last October, five states joined the FTC in suing Zillow and Redfin over their rentals partnership, and the cases were merged in November. The defendants sought a dismissal earlier this year, which the judge denied, and on May 20 filed an official response to the FTC’s claims.

The complaint is scheduled for a bench trial, meaning the judge will hear and decide the case without a jury, on Aug. 24.

What the states and FTC asked for

In their June 10 motion, the plaintiffs asked for declarations that would have put more of a burden on Zillow and Redfin at trial if they had been granted. Specifically, they asked the court to:

• Deem the nationwide market for internet listing service (ILS) advertising for rental properties and for multifamily rental properties as the “relevant markets” for the case
• Declare the Zillow-Redfin deal an “acquisition of assets” under Section 7 of the Clayton Act, which prohibits mergers and acquisitions that would substantially lessen competition
• Declare the deal “presumptively unlawful” for further concentrating already highly concentrated relevant markets and therefore lessening competition

Zillow, Redfin dispute FTC assumptions

On June 24, the defendants asked the court to reject the FTC’s motion outright. 

Regarding the relevant markets, they said rental competition is local, not national, and non-ILS companies such as Google and social media outlets compete for rental advertising dollars with ILSs like Redfin and Zillow. Thus, those types of companies should not be excluded as competitors in the same market. 

In response to the FTC’s request to to define the Zillow-Redfin deal as an acquisition of assets that is presumptively unlawful, the defendants argued that it is an open question whether the deal was a merger and that the presumption request was improper at this stage of the proceedings.

Judge convinced by defendants’ arguments

In his July 8 ruling, Trenga agreed with the defendants, finding that “genuine disputes of material fact existed” regarding “the relevant product market, relevant geographic market, and the presumptive illegality of Defendants’ challenged activity for purposes of Plaintiffs’ claim under Section 7 of the Clayton Act.”

The defendants, not surprisingly, supported the ruling. 

“The FTC asked the court to partially resolve this case before Zillow has the opportunity to present its full evidence at trial — evidence that will demonstrate the pro-competitive effects of this partnership for renters and housing providers,” Zillow said in a statement on its website. 

“We are pleased with the court’s decision today, and look forward to presenting the full record at trial next month.”

Similarly, a Redfin spokesperson told Real Estate News the company “strongly” disagrees with the FTC’s allegations and is eager to present “the full facts” at trial.

“The reality is simple: Redfin’s actions are pro-competitive and benefit consumers,” the spokesperson said in a statement.

“Redfin pursued the Zillow partnership to maintain and grow Redfin’s rental business.  And because of that decision, Redfin’s websites have more rental listings than ever before and Redfin can invest even more in search innovations that directly benefit our customers.”

The FTC declined to comment for this story. 

Ahead of a July 2 deadline to submit public comments, advocates are warning the Federal Trade Commission that it must keep close watch over Elon Musk’s X and firmly reject a recent bid to end the agency’s ongoing audits of the platform’s data handling.

Last month, the FTC posted a notice explaining that X had argued that an FTC order was no longer necessary due to changes Musk had made to the platform.

The initial order came as a penalty after the FTC found that a coding error had caused then-Twitter to improperly share users’ contact information for ad targeting that had initially been submitted for two-factor authentication. Under the order, X is subjected to costly independent audits, and the FTC has authority to demand documents to ensure compliance with data privacy laws without taking additional legal action.

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© CHARLY TRIBALLEAU / Contributor | AFP