A resident of the State of Washington is suing the predictive markets platform Kalshi in court, claiming that his sports bets were illegal and demanding the return of over $580,000. The case raises a novel question: can losing bettors obtain compensation by invoking the illegality of the platforms on which they placed bets?
Scott Bright, a resident of Bellevue in the State of Washington, filed a complaint on September 24 with the King County Superior Court. This man claims to have lost more than $308,000 betting on sporting events via Kalshi, an American predictive markets platform. He is now demanding over $580,000, arguing that these transactions took place in violation of Washington State law, which prohibits online gambling.
The complaint notes that the bets were placed during a period when the State Attorney General had already filed lawsuits against KalshiEX LLC in the same court for the same reasons. Scott Bright relies on this preexisting procedure to support his individual restitution claim.
Kalshi responded by filing a motion to dismiss, seeking to have the complaint rejected. The company, which presents itself as a marketplace regulated by the U.S. federal futures market authorities, disputes the characterization of its activities as illegal gambling under state laws.
Beyond the specific case, this matter opens a new legal front. Several attorneys general across the United States are attempting to shut down Kalshi for violating local gambling laws. But Scott Bright’s approach tests another path: that of an individual claim, whereby an unlucky bettor seeks to recover losses by invoking the platform’s illegality itself. The outcome of this procedure could set a precedent for other users in similar situations.
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