Bellevue man sues Kalshi for $580,000 as CFTC investigates prediction market

A Bellevue man is suing prediction-market company Kalshi, seeking to recover more than $580,000, which he said he lost betting on sporting events through the platform while living in Washington.

The lawsuit, filed Oct. 23 in U.S. District Court in Seattle and obtained by MyNorthwest, accuses Kalshi of operating an illegal gambling business in Washington and violating the state’s Consumer Protection Act.

The complaint argues that Kalshi’s sports event contracts amount to sports betting, which is prohibited under Washington law.

The lawsuit adds to growing legal scrutiny of Kalshi, which is also facing a separate lawsuit from Washington Attorney General Nick Brown. Meanwhile, the federal Commodity Futures Trading Commission is investigating whether Kalshi improperly notified the agency about certain event contracts.

Bellevue man seeks more than $580,000 after reported $308,000 loss

Scott Bright deposited $315,353.94 into his Kalshi account through 253 separate transactions between June 17 and Aug. 14, 2026, according to the lawsuit.

He used the money to wager on sporting events, including Major League Baseball games, professional tennis matches, and professional baseball games in South Korea and Japan.

The complaint said Kalshi charged Bright nearly $5,600 in funding fees and another $84,062 in trading fees.

His net realized losses, including fees, totaled $308,781.62, according to the lawsuit. His remaining balance was $983.27.

But Bright is seeking $580,544.98 under Washington’s Recovery of Money Lost at Gambling Act.

His attorneys argue Washington law allows people who lose money gambling illegally to recover losses on an event-by-event basis. Under that calculation, winnings from one sporting event cannot be used to offset losses from another.

The lawsuit also seeks enhanced damages, attorneys’ fees, interest and other relief.

Bright is suing individually, not on behalf of a proposed class of Kalshi customers.

Lawsuit follows Washington’s legal fight with Kalshi

The lawsuit argues that Kalshi continued accepting Bright’s money even after Washington officials publicly challenged the company’s legality.

Attorney General Nick Brown filed a separate lawsuit against KalshiEX on March 27, alleging the company was offering and promoting illegal gambling in violation of Washington’s Gambling Act and Consumer Protection Act.

On July 17, King County Superior Court Judge John F. McHale granted the state’s request for a preliminary injunction. An amended order entered Aug. 12 directed Kalshi to stop offering, accepting, and facilitating sports-related event contracts in Washington, among other restrictions.

The Bellevue man’s lawsuit said all 253 of his deposits occurred after the attorney general publicly filed the state’s lawsuit.

It also alleges Kalshi continued allowing him to access the platform and accept his money through Aug. 14, despite the court’s injunction.

Kalshi later displayed a notice to Bright that using the app in his location was prohibited, according to the complaint.

The lawsuit also raises questions about how Kalshi makes money from its platform. It points to disclosures in the company’s rulebook that an affiliated company participates in markets by placing orders on either side of trades, with profitability as its business purpose.

The plaintiff alleges that Kalshi’s affiliate or other market makers may have taken the opposite side of some of his bets.