'Event Contracts' or Betting? Man Sues Kalshi After Losing $308K, Claiming It Is Illegal 'Gambling'

A Bellevue man who says he lost $308,781.62 trading sports contracts on Kalshi has sued the prediction-market operator, alleging that it offered illegal gambling in Washington despite the state's restrictions.

Scott A. Bright filed his complaint in King County Superior Court on 24 September 2026. Kalshi moved the case to federal court on 23 October and is seeking its dismissal.

Bright claims net realised losses of $308,781.62 (€275,186 and £229,703), including fees. He is seeking $580,544.98 (€517,382 and £431,867) in restitution, arguing that Washington law allows losses to be calculated separately for each sporting event rather than offset against winnings elsewhere.

The complaint says his account retained $983.27 (€876 and £731) after the disputed trading period. These figures, including the larger damages demand, are allegations made by Bright, not findings by a court.

His calculation relies on a 1950 Washington Supreme Court ruling. Whether that precedent applies to his trades remains contested.

Kalshi Disputes Gambling Allegations

The lawsuit raises a question confronting prediction markets across the United States: are contracts tied to sporting results federally regulated financial products, or bets subject to state gambling laws?

Kalshi says its event contracts are governed by the Commodity Exchange Act and overseen by the Commodity Futures Trading Commission. In a motion filed on 30 October, the company argued that Bright had not claimed he was misled about trading risks, charges or how the platform operated.

Kalshi also disputes that it received Bright's trading losses. It says his positions were matched with other market participants, who received money when trades went against him.

Bright's complaint details his activity between 17 June and 14 August. He says he transferred $315,353.94 (€281,043 and £234,592) through 253 debits and traded contracts involving baseball and professional tennis. The activity allegedly generated $14,396,457.30 (€12,830,123 and £10,709,525) in transactions.

He claims Kalshi charged $84,062.71 (€74,917 and £62,534) in trading fees and $5,589.05 (€4,981 and £4,158) in funding fees.

Bright also alleges that a Kalshi-affiliated trading operation took the other side of a substantial portion of his positions. His complaint acknowledges that he cannot establish the identities of those counterparties without records held by Kalshi.

Washington Restrictions Add Pressure

Washington's attorney general filed a separate lawsuit against Kalshi in March, alleging violations of state gambling laws.

A judge granted a preliminary injunction in July, followed by an amended order in August restricting contracts connected to sports, elections and other subjects. The deadlines for implementing location restrictions came after Bright's final reported transfer.

In a separate case, the US Court of Appeals for the Ninth Circuit ruled on 28 August that Kalshi's sports contracts were unlikely to receive the federal protection it claimed against Nevada's gambling enforcement. That ruling did not decide Bright's case.

Kalshi has also asked to pause proceedings while the US Supreme Court considers whether to review a separate dispute concerning state regulation of prediction markets.

Bright's complaint includes consumer-protection and unjust-enrichment claims. Alternatively, he seeks to recover the funds he transferred and the fees he paid if his larger damages calculation is rejected.

The case remains at an early stage, with motions pending. No court has ruled that Bright is entitled to restitution. The proceedings will address whether his claims can proceed and whether the losses he alleges are recoverable under Washington law.