By the time a King County judge ordered Kalshi on 12 August 2026 to stop offering sports, election and five other kinds of event contracts to people in Washington, the same state had already agreed in federal court not to enforce its gambling law against Robinhood. Six days after the injunction it signed a second agreement of the same kind with the exchange that trades as OG. Three federally designated venues, one state, one legal question, and as of 7 October 2026 two of them operate under a negotiated pause while the third operates under a court order with a geofence and a daily penalty clause. This piece reads the documents behind that split. It is not a complaint about fairness. It is an account of how a patchwork gets built when every venue litigates alone, and of why the category's answer to it has to be a standard that applies to everyone on the same day.
The state's position did not change between the three cases
Washington's view of prediction markets has been stated in one place since 9 December 2025, when the Washington State Gambling Commission published a notice on prediction markets saying that offering events based contracts, or participating in those markets, is not authorized in the state. The notice acknowledged in the same breath that the future of the products was a subject of ongoing litigation. Nothing in the later filings retracts either half of that sentence.
The Attorney General then sued KalshiEX on 27 March 2026 in King County Superior Court under the Gambling Act and the Consumer Protection Act. Three days later Robinhood Derivatives sued the Commission's officials in the Western District of Washington, asking a federal court to declare that the Commodity Exchange Act shields its role in event contract trading. Two exchanges, the same week, and two different doors into court: one venue was a defendant in state court, the other was a plaintiff in federal court. That difference in posture, not any difference in product, is where the paths split.
Robinhood got the first pause, three months before the injunction
On 21 May 2026 Judge John C. Coughenour entered a stipulated order in Robinhood Derivatives, LLC v. Griffin, No. 3:26-cv-05311. Under it the state defendants agreed not to pursue civil or criminal enforcement against Robinhood, under a long list of Gambling Act and Consumer Protection Act provisions or any other Washington law, with respect to Robinhood's role in transactions involving event contracts traded on a designated contract market. The pause runs until the Ninth Circuit decides one of three related Nevada appeals and the en banc stage of that decision is over. The federal case itself was stayed. The docket shows the agreement was reached roughly seven weeks after filing.
That is the precedent most coverage of the later dispute missed. When Washington agreed to hold off against OG in August, it was not inventing a special arrangement. It was repeating, almost word for word, a template it had already signed in May.
OG filed in July and had the same terms by mid August
North American Derivatives Exchange, Inc. is one of the oldest event contract venues in the federal system. The CFTC's designated contract market record traces it from its 2004 designation as HedgeStreet through its years as Nadex under IG Group to its acquisition by Foris DAX Markets in March 2022, after which it also does business under the Crypto.com name. In February 2026 the exchange launched OG as a separate platform for its prediction market products; Crypto.com's launch announcement of 3 February 2026 describes sports event contracts alongside financial, political, cultural and entertainment ones.
OG sued on 22 July 2026. The complaint in No. 2:26-cv-02579 names the Attorney General, the Gambling Commission's executive director and four commissioners in their official capacities, and pleads express, field and conflict preemption. It asks for a declaration that Washington's gambling laws, as applied to OG, are preempted, and for an injunction against their enforcement. On 18 August the parties filed a stipulated motion, and on 27 August Judge Coughenour entered it as an order.
Its operative paragraph mirrors the Robinhood text. The state will not pursue civil or criminal enforcement against OG under the Consumer Protection Act, the Gambling Act, the Recovery of Money Lost at Gambling Act or any other Washington law with respect to OG's role in DCM traded event contracts, until a further order follows a Ninth Circuit decision and one of three conditions occurs: the deadline for en banc review passes unused, en banc review is denied, or an en banc decision issues. Two details are worth reading closely. If no further order comes within eighteen months of filing, the state may withdraw on fourteen days' notice. And the parties agree that the stipulation "does not resolve any claim or defense."
What OG did not have to promise
Read the stipulation for obligations on the exchange and you will not find any. There is no geofence, no list of contract categories withdrawn from Washington, no record preservation clause, no advertising restriction. The state gave up enforcement for a period and the exchange gave up nothing it can be held to, other than staying in a stayed case. That is not a criticism of either party. A stipulation like this is a litigation tool for parking a case behind an appellate ruling, and both sides plainly expected the Ninth Circuit to decide the same question for everyone.
Put it next to the amended King County order of 12 August 2026 and the contrast is stark. Kalshi must preserve logs, communications and geolocation determinations relating to Washington consumers; implement IP and residency geofencing by 19 August and a multi source solution through GeoComply by 2 September; stop offering seven subject areas in the state, named in part by the tabs on its own platform; hold the fees it collected from self identified Washington consumers in place; and either pay 120,000 dollars a day after the geofencing deadline or explain the delay in a sworn affidavit. We read that order section by section in our earlier piece on the category tabs. The point here is narrower. On the same day, for the same legal question, one venue's obligations ran to engineering, records and penalties, and another's ran to none.
Kalshi asked for the same deal and the court said no
Kalshi tried to close the gap the obvious way. KOMO News reported on 21 August 2026 that Kalshi asked Judge McHale to reconsider the amended injunction or stay it on terms similar to those the state had given OG, with the motion noted for 2 September without oral argument. The ruling on that motion is not available online, and we have not seen it. The PM Pulse, a prediction market newsletter written by Sam Schwartz, reported in its issue 049 that Judge McHale denied the motion in mid September 2026, and described Kalshi's argument as the unequal treatment theme. The Attorney General's office had already said in its release of 13 August 2026 that the Washington Court of Appeals declined to stay the injunction.
The fairness argument lost, and on the documents it is easy to see why it would. The pauses for Robinhood and OG are contracts between the state and a plaintiff in federal court. They bind the parties who signed them. They do not tell a state trial judge, who has already found a likelihood of success on the merits against a different defendant, what that defendant is entitled to. Kalshi had also tried the federal route: it removed the state case in March, Judge Coughenour sent it back to King County in May, and the Ninth Circuit's docket in No. 26-3106 shows Kalshi's May 2026 motion to stay the remand and later motions to pause that appeal behind the Nevada cases. Procedure, not product, sorted the three venues into two regimes.
Everyone is waiting on the same appeal
The irony is that all three Washington outcomes point at one file. The Ninth Circuit decided KalshiEX, LLC v. Assad, No. 25-7516, on 28 August 2026, holding that Nevada's gaming law is likely not preempted as applied to Kalshi's sports event contracts because those contracts are not swaps. The case is linked on the court's docket with the Nadex appeal, No. 25-7187, and the Robinhood appeal, No. 25-7831. On 9 September 2026 Kalshi filed a petition for panel rehearing and rehearing en banc, entry 206 on the appellate docket, and both sides filed status reports on 25 September and 1 October. While that petition is pending, none of the conditions in either Washington stipulation has occurred, so both pauses still hold.
There is at least one more venue in the queue. Ludlow Exchange LLC v. Brown, No. 3:26-cv-05888, was filed in the same federal district on 6 August 2026 against the same six officials, with Novig, Inc. disclosed as an affiliate, and marked as related to the OG and Robinhood cases. As of 7 October 2026 the public docket copy shows no stipulation and no ruling. Whether it ends up in the first regime or the second is, again, a question of procedure and timing.
A patchwork nobody designed is still a rulebook
It is tempting to treat all this as noise that the Ninth Circuit will clear away. That misreads how it lands on users. OG's own complaint says it offers event contracts, including sports contracts, to Washington residents. So a person in Washington with accounts on two apps in September 2026 could meet two different products: one required by court order to geofence them out of sports and politics and to keep its location determinations, and one under no such order, protected by a pause the state had signed. Neither app chose that difference on consumer protection grounds. The difference was produced by which courthouse each venue walked into first.
That is the real cost of venue by venue enforcement, and it falls on the category as a whole. When the protections a user gets depend on a venue's litigation calendar, users cannot learn what to expect from a regulated prediction market, and the argument that federal designation means something becomes harder to make, not easier. Commission Regulation 38.151 requires a designated contract market to provide impartial access under transparent, non discriminatory criteria. The King County court held that sorting a book by state does not breach that duty. The broader principle behind the rule, that similarly placed participants should face comparable terms, is exactly what the Washington patchwork does not deliver across venues.
Unequal treatment is an argument for a common floor, not against one
The instinct of a venue under the stricter order is to argue that it should be treated like the venue under the looser one. That instinct is understandable, and in Washington it did not work. The better argument runs the other way. If the controls Kalshi was ordered to build, a documented geofence, retained location determinations, a clear statement of which contract categories reach which jurisdiction, exclusion from targeted advertising, are reasonable, then they are reasonable for every venue serving that state, whatever its procedural posture.
That is what Directive 05 of our manifest asks of signatories: standards set against the jurisdiction that regulates next, not only the one that has not yet. A venue operating under a negotiated pause is precisely the one that has not been regulated yet. The pause is temporary by its own terms, with an eighteen month backstop and a trigger tied to an appeal that has already gone against the exchanges once. A venue that uses that time to build what the stricter order requires will not be negotiating its controls under a deadline when the pause ends. We set out what that looks like for positions already held when access is cut in our piece on geoblocking and open positions; the same logic applies to everything upstream of the trade.
The fairness complaint has one more honest answer. A standard the industry writes for itself is the only version of this that applies to every venue at once. Courts cannot produce it, because each case binds only its parties. The Ninth Circuit can settle the preemption question, but not what a responsible venue does in a state while the question is open. That part is the category's to write, and Washington has now shown, three times in five months, what happens when nobody writes it.