Kalshi ruling puts crypto prediction market boom under pressure

A Washington court has ordered Kalshi to stop offering most of its event contracts in the state, as prediction markets become one of crypto’s busiest trading arenas.

According to Pew Research data, the period between July 2024 and the first five months of 2026 saw cryptocurrency contracts contributing to approximately 20% of Polymarket’s trade volume and around 7% of Kalshi’s.

Data collected by Artemis indicate that the contribution of cryptocurrency-related contracts in prediction markets is still significant. For example, for the week ending August 9, 2026, crypto contracts amounted to about 20.3% of Kalshi’s huge $8.11 billion worth of trade, while Polymarket managed to achieve 10.2% of its volume of $1.78 billion due to transactions involving cryptocurrencies. Whenever a state intervenes in Kalshi’s offerings, it impacts the legal discussion around how far the prediction market and its connection to crypto can advance.

A gambling ruling, not a trading one

In a news release, the Washington Attorney General’s (AG’s) office said Judge John McHale of King County Superior Court established that Kalshi appeared to have violated Washington’s Gambling Act and Consumer Protection Act, as it conducted illegal gambling activities, as noted by the court. The judge provided Washington with a preliminary injunction on July 20, stating that the state was likely to win the case and rejecting Kalshi’s argument that federal commodities legislation overrode Washington’s gambling statutes.

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