A Washington man lost $308,000 betting on Kalshi — now he's suing for $580,000, saying it never should've let him

Chris MorrisWed, November 11, 2026 at 12:00 PM UTC

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Prediction markets strenuously object when they’re labeled as gambling sites, but a man who lost more than $300,000 on Kalshi is hoping the courts will see them as just that.

Scott Bright of Bellevue, Washington, is suing Kalshi after running up a net loss of more than $308,000 on the platform when he wagered on sporting events. His lawsuit says the “wagering occurred at a time when it was unlawful in Washington and when the Washington Attorney General had already sued KalshiEX LLC in this Court alleging precisely that.”

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Bright is asking for more than $580,000 — which includes both the $308,000 in losses as well as the winnings he recycled into additional wagers, which he then lost.

Seeking to dismiss

Kalshi has since filed a response to the lawsuit, seeking to dismiss it.

Bright, the company said, did not lose money gambling, but instead lost it on “event contracts,” something that can only be regulated by the federal government, not the state. In addition, Kalshi says Bright knew that losing money was possible while he continued to utilize the platform.

“Plaintiff alleges that his activity on the platform was gambling and that he ‘lost.’ He does not allege that anyone misled him about how the platform worked, what it charged or the risk that any position might lose,” Kalshi wrote in its response. “Yet, he now sues KalshiEX and its parent, Kalshi Inc., to recover nearly double his own alleged net realized loss.”

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Kalshi, in addition to seeking to dismiss the case, also filed a motion to stay, which would pause proceedings until the U.S. Supreme Court decides whether to hear a separate case that centers on whether state gambling laws apply to prediction markets.

A separate suit by the state of Washington resulted in a preliminary injunction that forced the company to geofence the state and stop accepting several types of wagers. Bright transferred cash into his Kalshi account before those took effect.

Many losers, few winners

Prediction markets tout their winners in marketing, but just like traditional gambling, users are more likely to lose.

A study by The Wall Street Journal found that 67% of profits on Polymarket, one of the leading prediction market platforms, go to just 0.1% of accounts. And of the 1.6 million accounts studied, more than 1 million were unprofitable. On Kalshi, there are 2.9 unprofitable users for every profitable one.

Prediction markets are also easily susceptible to abuse, as insiders (whether on staff or members of an audience in pre-recorded events) might know what will be said or done in advance and place a bet on that information. Earlier this year, a soldier in the U.S. Special Forces placed a wager using classified information about the removal of Venezuelan leader Nicolás Maduro, earning himself over $400,000. He was later arrested for that.

And in September, disgraced former U.S. representative George Santos was slapped with a lifetime ban from Kalshi for allegedly improperly manipulating the price of contracts on the platform, pointing to his public statements about his plans to attend the State of the Union address earlier this year and wagers he subsequently made on that contract. (He led people to believe he would be at the speech, but was not. Meanwhile, he placed bets against his attendance.)

Santos, via trades on the platform about that event, made profits of $17,840, the company said in a regulatory filing.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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Source: “AOL Money”