- Kalshi filed Oct. 30 to end a Washington bettor’s $580,544.98 loss-recovery suit in federal court or freeze it for six months.
- Scott Bright pleads a $308,781.62 net loss but claims $580,544.98 by adding up every losing event and ignoring every winning one.
- Kalshi says a fee taken win or lose makes it neither the statutory winner nor the proprietor of any game Bright played.
- Kalshi says the state’s suit already seeks the same money and that letting Bright’s case proceed would invite copycat suits.
SEATTLE – A Bellevue trader’s $580,544.98 claim against Kalshi under RCW 4.24.070, Washington’s law letting gamblers recover money lost at illegal games, drew two filings from the exchange on Oct. 30: one to end the case outright and one to halt it for six months.
The trader, Scott A. Bright, pegs his own net loss on sports contracts at $308,781.62. Kalshi’s position is that its fee came off every trade regardless of outcome and that whatever Bright lost went to whoever held the opposite position, not to the exchange.
Bright named two defendants: KalshiEX LLC, which runs the exchange, and the parent company, Kalshi Inc. RCW 4.24.070 gives anyone who loses money at “illegal gambling games” a claim against “the dealer or player winning” or “the proprietor for whose benefit such game was played or dealt.” It runs alongside, not inside, the state’s own case against KalshiEX, adding one bettor’s own claim to the dispute over Washington sports betting.
What The Complaint Seeks
Kalshi’s notice of removal says Bright served the complaint on both companies Sept. 24, and on Oct. 23 the defendants pulled the case out of King County Superior Court and into Seattle federal court, the Western District of Washington, on diversity grounds. U.S. District Judge Tana Lin is assigned. Bright is suing on his own behalf and does not ask to represent a class, the complaint says.
From June 17 through Aug. 14, according to the complaint, 253 bank debits carried $315,353.94 into Bright’s Kalshi account. Funding and trading fees took $89,651.76 of it. When the trading stopped, he was down $308,781.62 net, with $983.27 left in the account.
His first count nonetheless asks for $580,544.98. The complaint describes that number as a per-game total that gives Kalshi no credit for events Bright won. It sits about $272,000 above his net loss and about $265,000 above everything he deposited. A second count rests on Washington’s Consumer Protection Act, and a third, an unjust-enrichment claim pleaded as a fallback, asks for the $315,353.94 he sent in plus the $89,651.76 in fees.
Those deposits were turned over in $14,396,457.30 worth of trades, the complaint says, roughly 46 times the money he put in. Kalshi’s motion says that volume is the only route to $580,544.98: the same dollars get counted as a fresh loss each time they were lost, won back and wagered again.
For its no-offset rule, the complaint leans on Heitfeld v. Benevolent & Protective Order of Keglers, decided by the Washington Supreme Court in 1950, which it reads to mean a loser’s wins in other, distinct games do not reduce what he can recover.
Kalshi reads Heitfeld differently: each game is its own claim, the defendant gets credit for anything won in that game, and a plaintiff therefore has to plead the games. Bright, the motion says, identifies no event, date or amount behind his figure. On Bright’s method, recoverable losses grow with trading volume. On Kalshi’s reading, they stay tied to money actually lost.
How Kalshi Answers
Kalshi’s motion to dismiss says the exchange cannot be “the dealer or player winning” when, by Bright’s own account, its fee did not depend on how any position settled and the losing side of each trade paid the winning side, not the exchange.
Bright’s complaint tries to close that gap with an allegation made on information and belief: a Kalshi affiliate that trades on the exchange under Rule 2.12(e) of its rulebook, or market makers the company pays, sat across from a large share of his trades. Only Kalshi knows who held each opposite position, the complaint says. Kalshi calls the theory speculation and notes that the affiliate is not a defendant.
Kalshi also argues that neither company is a “proprietor” because the underlying games are baseball and tennis events it neither runs nor benefits from, markets that licensed sportsbooks in states with legal sports betting also list. And it says Bright never pleads where he was when he placed each trade.
Kalshi adds that the Commodity Futures Trading Commission has designated it a contract market since 2020 and that it self-certified its sports contracts in January 2025, so any error would be a mistake of law rather than a knowing violation. The motion cites a July 13 Northern District of Illinois ruling in Lavery v. Kalshi Inc. that dismissed loss-recovery claims against Kalshi Inc.
Stay Request
Kalshi’s separate motion asks Lin to pause the case for an initial six months, with status reports, while the U.S. Supreme Court considers a petition in Flaherty v. KalshiEX (No. 26-299) on whether federal commodities law preempts state gambling laws as applied to sports event contracts.
Kalshi says the appeals courts have split three ways. The Third Circuit sided with Kalshi against New Jersey on April 6, the Ninth Circuit, which hears appeals from Washington’s federal courts, held Aug. 28 in KalshiEX v. Assad that sports event contracts are likely not swaps, and the Sixth Circuit found no preemption Sept. 25. The motion says a stay costs Bright nothing because the state court’s injunction already addresses any ongoing harm and he seeks money for past trading.
State Case And Copycat Risk
The state’s own case dates to March 27, when Attorney General Nick Brown’s office filed against KalshiEX in the same King County court and asked, among other relief, for the return of what Washingtonians had lost, according to the office’s announcement. Kalshi says that case pursues the same theory and the same recovery, Bright’s money included.
Bright’s complaint says his first transfer came 82 days after that filing and his last, on Aug. 14, came five days before the first geofencing deadline in the Aug. 12 amended order that halted Kalshi sports markets in the state. Any Washington customer who traded after March 27 shares that timeline, and Kalshi’s stay motion warns that letting Bright’s case proceed would invite what it calls “copycat litigation” from other traders.
Kalshi noted the stay request for Nov. 20 and the dismissal motion for Nov. 27 on Lin’s calendar and asked to argue both in person.
