Man who lost $308,000 on sports bets sues Kalshi over illegal gambling
Scott Bright of Washington state, who lost more than $308,000 betting on sports through the prediction market Kalshi, has sued to recover over $580,000. Kalshi argues the trades were federally regulated event contracts, not gambling.
Scott Bright, a resident of Bellevue, Washington, filed a lawsuit on September 24 in King County Superior Court against the prediction market platform Kalshi. He alleges it breaks the state's ban on online gambling and demands his losses back. The case matters because it tests whether losing gamblers can win restitution through individual suits, while state attorneys general across the US are already trying to rein in Kalshi.
What the suit claims
Bright says Washington has banned internet gambling since 2006 and has long allowed people who lose money at illegal gambling to recover it from the operator. Between June 17 and August 14, he transferred $315,353.94 to Kalshi in 253 debits from his checking account, mostly betting on professional baseball and tennis. His net loss came to $308,781.62, leaving $983.27 in the account.
He seeks $580,544.98, calculated event by event under a 1950 Washington Supreme Court ruling that bars offsetting wins against losses. As an alternative, he asks for all the money he transferred plus $89,651.76 in fees, which would exceed $405,000. He also alleges that a Kalshi trading affiliate took the opposite side of a substantial share of his positions, though he concedes he cannot know this for certain.
Kalshi's response
On October 30, Kalshi moved to dismiss. It says the products are event contracts governed by the Commodity Exchange Act and overseen by the Commodity Futures Trading Commission (CFTC), not state gambling law. Kalshi calls itself a neutral exchange earning revenue from fees and says Bright's losses went to counterparties. It also wants the case moved to federal court and paused until the US Supreme Court decides whether to take up a related case.
Wider context
Washington has sued Kalshi itself, and in August a King County judge issued a preliminary injunction barring contracts on sports, elections, politics and other categories. That order took effect after Bright's losses. Also in August, the US Court of Appeals for the Ninth Circuit ruled that Nevada can regulate Kalshi under its gambling laws.
