Gambler sues Kalshi over $308,000 in sports bets

Bellevue resident loses $308,000

Scott Bright, a Bellevue, Washington resident, lost over $308,000 making sports wagers on Kalshi. He is now suing the prediction market for violating Washington's ban on online gambling.

Bright seeks $580,000 in damages

Bright's lawsuit, filed September 24 in King County Superior Court, seeks payment of over $580,000. This is nearly double his net loss, calculated using an event-by-event method from a 1950 Washington Supreme Court ruling.

Washington banned internet gambling in 2006

Washington has prohibited internet gambling since 2006 and provides a statutory cause of action permitting any person who loses money at illegal gambling to recover it from the proprietor.

Bright's betting timeline and amounts

Between June 17 and August 14, 2026, Bright transferred $315,353.94 to Kalshi in 253 separate debits. He wagered on professional baseball games and tennis matches, with Kalshi collecting $84,062.71 in trading fees.

Kalshi claims these are event contracts

Kalshi argues the contracts are not gambling but event contracts regulated by the federal Commodity Futures Trading Commission under the Commodity Exchange Act, not subject to state gambling laws.

“The contracts which Plaintiff mischaracterizes as gambling are event contracts offered on the Platform subject to the CEA, in conformance with the rules and regulations of the CFTC.”

Kalshi says it is a neutral platform

Kalshi describes itself as a neutral exchange platform with no financial stake in event outcomes. It makes revenue by collecting transaction fees, not from betting against users.

But Kalshi operates a trading affiliate

Kalshi's rulebook reveals it has a trading affiliate that participates on the platform and provides liquidity by placing orders on either side of markets. Bright alleges this affiliate took the opposite side of his positions.

Bright cannot see who he bet against

Bright does not know whether Kalshi's affiliate was on the other side of any of his bets. The identity of counterparties and their profits is information exclusively within Kalshi's possession, his lawsuit states.

“The identity of the participant on the opposite side of each of Plaintiff's positions, and the profit each such participant realized, is information exclusively within Kalshi's possession.”

Ninth Circuit ruled sports bets are gambling

The US Court of Appeals for the Ninth Circuit ruled in August that Nevada can regulate Kalshi under gambling laws.The court found that placing sports bets, even when called by another name, is still gambling.

“placing sports bets, even when called by another name, is still gambling.”

Washington won a preliminary injunction

Washington won a preliminary injunction against Kalshi in August. A King County judge ordered Kalshi to implement geofencing and stop offering wagers related to sports, elections, politics, entertainment, culture, tech and science.

Bright's bets occurred before the order

Bright transferred his funds to Kalshi before the geofencing order took effect. On September 15, he tried to access the app but received a notice that using it in his location was prohibited.

Kalshi seeks delay pending Supreme Court

Kalshi filed a motion to stay the proceedings until the US Supreme Court decides whether state gambling laws apply to prediction markets.The company also moved to dismiss Bright's case and transfer it to federal court.

State and individual suits overlap

Washington's attorney general is pursuing overlapping claims against Kalshi in King County Superior Court, seeking to recover all money Washingtonians lost through the company's alleged illegal gambling operation.