Scott Bright Kalshi Lawsuit, Washington Man Seeks $580,545 After Losing $308,781 on Sports Event Contracts

A Washington man who says he lost more than $308,000 trading sports event contracts on Kalshi is seeking $580,544.98 from the prediction-market company. He alleges the platform offered illegal gambling in a state that was already suing it over those contracts.

The lawsuit, filed by Scott A. Bright, raises a question that reaches well beyond one customer: can a company avoid state gambling laws by describing sports wagers as exchange-traded contracts regulated by the Commodity Futures Trading Commission (CFTC)?

Bright says no. He argues his transactions were sports gambling under Washington law and that Kalshi should return what he lost. His main claim relies on Washington’s gambling-loss recovery statute, RCW 4.24.070, which lets a person who loses money at illegal gambling sue the winning player or dealer, or the proprietor for whose benefit the game was conducted.

Kalshi disputes that. It says Bright’s losses went to other market participants, not to Kalshi, and that Kalshi earned fees whether he won or lost. It has asked the federal court to dismiss the case or pause it while related federal preemption disputes play out.

This is an individual lawsuit, not a class action. Other Kalshi customers are not automatically included, and there is no settlement or claim form. The allegations are unproven.

Scott Bright Kalshi Lawsuit: Quick Facts

Case detail	Information
Case name	Bright v. KalshiEX LLC and Kalshi Inc.
Federal case number	2:26-cv-04091-TL
Court	U.S. District Court, Western District of Washington
Judge	Tana Lin
Plaintiff	Scott A. Bright, of Bellevue, Washington
Defendants	KalshiEX LLC and Kalshi Inc.
Original complaint	September 24, 2026, King County Superior Court
Removed to federal court	October 23, 2026
Main law	Washington gambling-loss statute, RCW 4.24.070
Other claims	Washington Consumer Protection Act; unjust enrichment
Alleged net realized loss	$308,781.62
Amount sought under the statute	$580,544.98
Class action?	No
Plaintiff’s attorney	Michael Duane Daudt, Daudt Law PLLC
Pending motions	Kalshi’s motion to dismiss and motion to stay (both filed October 30, 2026)
Settlement or claim form?	None

Why Did Scott Bright Sue Kalshi?

Kalshi runs a prediction-market platform where users buy and sell contracts tied to the outcome of future events, including elections, economic data and sports. In sports markets, users take positions on whether a team or player will win.

Kalshi describes these as event contracts traded on a federally regulated exchange. Bright argues that, whatever the label, what he did was bet on sports outcomes, and that doing so violated Washington’s gambling laws while he lived in Bellevue.

The timing is a major part of his case. He alleges he kept sending money to Kalshi after Washington’s Attorney General had already sued the company over its sports contracts, and after a state court had issued a preliminary injunction. He argues Kalshi kept accepting his transfers anyway.

When Did Bright Trade on Kalshi?

According to the complaint, Bright made 253 separate transfers from his U.S. Bank checking account to Kalshi between June 17 and August 14, 2026. He says he used the money to trade contracts on Major League Baseball games, ATP and WTA tennis matches, Challenger and ITF tennis events, and professional baseball in South Korea and Japan.

He alleges Kalshi stayed available to him in Washington throughout that period and accepted every transfer, and that the app eventually displayed a message saying use in his location was prohibited.

Why Washington’s Own Lawsuit Against Kalshi Matters

On March 27, 2026, Washington Attorney General Nick Brown filed a separate enforcement action, State of Washington v. KalshiEX LLC, King County Superior Court No. 26-2-10264-3 SEA. The state alleged Kalshi was offering gambling without complying with Washington’s gambling laws.

On July 17, 2026, the state court granted a preliminary injunction after finding the state had shown a likelihood of success on important parts of its claims. An amended and updated order followed on August 12, 2026. According to the case information reviewed, it:

• Restricted Kalshi from offering certain event contracts to Washington consumers, including sports contracts.
• Required location controls and preservation of consumer records.
• Froze certain transaction fees collected from Washington customers.
• Set implementation deadlines of August 19 (initial location restrictions) and September 2 (additional geolocation controls).

Bright’s last reported transfer was on August 14, which is central to his argument. But the state case and Bright’s case are separate. A preliminary injunction is an order issued before final judgment and does not mean every allegation has been proven. It also does not by itself entitle Bright to recover his personal losses.

How Much Money Did Scott Bright Lose on Kalshi?

The numbers need careful reading because the amount Bright says he lost is not the amount he is asking the court to award.

Financial detail	Amount alleged
Total transfers to Kalshi (253 transfers)	$315,353.94
Funding fees deducted	$5,589.05
Amount credited to trading account	$309,764.89
Total trading transaction volume	$14,396,457.30
Trading fees collected	$84,062.71
Total funding and trading fees	$89,651.76
Net realized loss, as alleged	$308,781.62
Remaining account balance	$983.27
Amount sought under event-by-event calculation	$580,544.98

These are allegations from Bright’s complaint. Kalshi disputes the legal interpretation and the amount.

Why Did He Lose More Than $300,000?

Bright deposited $315,353.94, and after $5,589.05 in funding fees, $309,764.89 was credited to his account. He then traded sports contracts. The complaint says those funds were cycled through roughly $14.4 million in transactions.

That does not mean he deposited $14.4 million. The figure is total trading volume, including money reused after earlier positions settled. Kalshi allegedly collected $84,062.71 in trading fees on that activity whether Bright won or lost individual positions. The complaint puts his net realized loss at $308,781.62, leaving $983.27 in the account.

Why Is He Demanding $580,544.98 Instead of $308,781.62?

Bright relies on a 1950 Washington Supreme Court decision, Heitfeld v. Benevolent and Protective Order of Keglers, 36 Wn.2d 685, 220 P.2d 655 (1950), which interpreted the gambling-loss recovery law and addressed how losses across separate games are counted.

His argument is that winnings in one distinct gambling game cannot simply be offset against losses in another. Applied to his trades, each sporting event is treated as its own game, so losses on one event are not reduced by wins on another. On that approach, he calculates recoverable losses of $580,544.98, about $271,763 more than his stated net loss.

This is not a request for automatic double damages and not a settlement figure. It is Bright’s reading of how the statute applies to his trading history.

What Does Kalshi Say About the $580,545 Figure?

Kalshi calls the calculation flawed. In its October 30 motion to dismiss, it argues Bright is counting the same money more than once because he reused proceeds from earlier winning positions to enter later trades. It also says the complaint states a net loss of $308,781.62 but asks for $580,544.98 without identifying the individual events, contracts, dates and amounts behind the larger number. Kalshi further argues Bright cannot recover money he never actually parted with just because it was recycled through several trades, and it challenges whether the 1950 Heitfeld decision applies to modern event contracts.

The court has not decided which calculation is correct.

Which Laws Are Involved in the Scott Bright Kalshi Lawsuit?

Washington’s Gambling-Loss Recovery Statute (RCW 4.24.070)

This is the heart of the case. In substance, RCW 4.24.070 gives a person who loses money or something of value at an illegal gambling game a cause of action to recover it from the player or dealer who won, or from the proprietor for whose benefit the game was conducted.

To succeed, Bright must show that (1) the activity was an illegal gambling game under Washington law, and (2) Kalshi is a proper defendant under the statute, meaning it won his money or ran the game for its own benefit. This is where the case may turn:

• Kalshi says it was an exchange that matched Bright with other participants, so his losses went to those participants and not to Kalshi.
• Bright says Kalshi was the proprietor, and that the fees it collected on every trade show a financial benefit from the activity.

The statute’s text and how it fits a modern exchange model are questions for the court.

What Counts as Gambling in Washington (RCW Chapter 9.46)

Washington’s Gambling Act, RCW chapter 9.46, generally defines gambling in RCW 9.46.0237 as staking or risking something of value on the outcome of a contest of chance or a future contingent event not under the person’s control or influence, with an agreement that the person will receive something of value if a certain outcome occurs. Betting on a sporting event can fit that language, which is why Washington’s Attorney General and Bright both argue sports event contracts are covered. Kalshi’s answer is that these are federally regulated derivatives, not state-law gambling.

The Federal Commodity Exchange Act and Preemption

Kalshi’s defense rests on federal law. The Commodity Exchange Act gives the CFTC exclusive jurisdiction over transactions on registered designated contract markets (7 U.S.C. § 2(a)(1)(A)). Kalshi says that, as a CFTC-registered exchange, its event contracts are governed by federal law and cannot be regulated as gambling by the states, which is a preemption argument.

The Act also contains a special provision for event contracts. Under 7 U.S.C. § 7a-2(c)(5)(C) and CFTC Regulation 17 C.F.R. § 40.11, the CFTC may review contracts involving gaming or other activity it considers contrary to the public interest. States and challengers argue sports contracts are gaming, which states have historically regulated. The Act’s preemption and savings provisions (including 7 U.S.C. § 16(e)) have been argued in several courts, and federal courts have reached different results. Whether the Act preempts Washington’s gambling-loss claim here has not been decided.

Washington Consumer Protection Act (RCW 19.86)

Bright also asserts a Consumer Protection Act claim. A private plaintiff generally must show an unfair or deceptive act or practice, in trade or commerce, that affects the public interest, injures the plaintiff’s business or property, and caused that injury (Hangman Ridge Training Stables, Inc. v. Safeco Title Insurance Co., 105 Wn.2d 778 (1986)). Remedies under RCW 19.86.090 can include actual damages, attorneys’ fees and, at the court’s discretion, an award of up to three times actual damages, with the increase capped at $25,000. Kalshi argues Bright has not adequately pleaded a deceptive practice.

Unjust Enrichment

Under Washington law, unjust enrichment generally requires a benefit conferred on the defendant, the defendant’s appreciation of that benefit, and circumstances making it unjust to keep it without payment (see Young v. Young, 164 Wn.2d 477 (2008)). Bright’s theory is that Kalshi kept fees and money it should not have collected from illegal contracts. Kalshi’s position is that fees were earned under a lawful federal exchange framework.

Procedural Rules: Motion to Dismiss and Stay

Kalshi’s motion to dismiss falls under Federal Rule of Civil Procedure 12(b)(6), which tests whether the complaint states a plausible claim even if its facts are assumed true. Kalshi asks for dismissal with prejudice, meaning the claims could not be refiled. Its separate request for an initial six-month stay asks the court to pause the case while the U.S. Supreme Court considers a related preemption dispute. Courts have inherent power to stay cases, generally weighing the possible harm to each side and the orderly use of court resources (see Landis v. North American Co., 299 U.S. 248 (1936)).

These are Kalshi’s arguments, not rulings. The judge has decided neither motion.

What Is Happening in the Related Federal Kalshi Cases?

Kalshi’s stay request points to a broader fight over prediction markets. Per the reporting reviewed for this article:

• In Flaherty v. KalshiEX LLC, No. 26-299, a petition asks the U.S. Supreme Court to review the federal-preemption question. The Court has not agreed to hear it, and Kalshi’s deadline to respond was extended to December 7, 2026.
• On November 4, 2026, the Ninth Circuit denied rehearing in KalshiEX v. Assad, leaving in place its August 2026 ruling in that dispute. The Ninth Circuit covers Washington.
• Other states have also taken action against Kalshi, including New York, whose attorney general sued in July 2026, and Massachusetts. Courts in different circuits have not been consistent.

Neither the Supreme Court petition nor the Ninth Circuit ruling decides Bright’s individual claims, but they explain why Kalshi wants the case paused and why the outcome could affect how other states’ gambling laws apply to prediction markets.

What Is the Latest Status of the Scott Bright Kalshi Lawsuit?

Date	Event
March 27, 2026	Washington Attorney General sues KalshiEX in King County
June 17 – August 14, 2026	Bright’s 253 alleged transfers to Kalshi
July 17, 2026	State court grants preliminary injunction
August 12, 2026	Amended preliminary-injunction order
September 24, 2026	Bright files suit in King County Superior Court
October 23, 2026	Kalshi removes the case to federal court
October 30, 2026	Kalshi files motions to dismiss and to stay
November 2, 2026	Latest docket activity identified
November 4, 2026	Ninth Circuit denies rehearing in KalshiEX v. Assad
About November 27, 2026	Motion to dismiss reportedly noted for consideration
December 7, 2026	Kalshi’s extended response deadline in Flaherty at the Supreme Court

As of November 10, 2026, no ruling on the merits has been issued, the court has reportedly deferred scheduling while the motions are pending, and no settlement exists. Check PACER for newer entries, since the court could rule on the motions at any time.

Can Other Washington Kalshi Users Recover Losses?

This lawsuit does not make other Kalshi users part of a class, and it does not create a claims process. Anyone else who lost money on sports contracts would have to evaluate their own rights. The gambling-loss statute is an individual action, and each person’s facts, such as where they were located, when they traded and how they funded their account, could matter.

Time limits apply to these claims, and the outcome of Bright’s case could affect how courts read the statute, so a person with significant losses may want to speak with a qualified Washington attorney. Be cautious about sites or advertisers promising guaranteed recovery.

If gambling or trading is causing financial or personal harm, the National Problem Gambling Helpline is available at 1-800-GAMBLER (1-800-426-2537).

Frequently Asked Questions About the Scott Bright Kalshi Lawsuit

Who is Scott Bright and why is he suing Kalshi?

Scott A. Bright is a Bellevue, Washington resident who alleges he lost $308,781.62 trading sports event contracts on Kalshi between June 17 and August 14, 2026. He argues the contracts were illegal gambling under Washington law.

How much is Scott Bright asking Kalshi to pay?

$580,544.98 under the gambling-loss statute, based on an event-by-event calculation. His alleged net loss is $308,781.62.

Is the Scott Bright Kalshi lawsuit a class action?

No. It is an individual lawsuit. There is no settlement or claim form.

What law is Bright using?

Mainly Washington’s gambling-loss recovery statute, RCW 4.24.070, plus the Washington Consumer Protection Act and unjust enrichment.

What does Kalshi say?

Kalshi says its products are federally regulated event contracts, not gambling, that its losses-and-winnings flow to other market participants, and that Bright’s damages are miscounted. It has asked the court to dismiss the case with prejudice or to stay it.

Has a judge ruled on the lawsuit?

No ruling on the merits or on Kalshi’s motions has been identified.

Does the Washington Attorney General’s case decide Bright’s lawsuit?

No. It is a separate state enforcement action. Its preliminary injunction is relevant background but does not award Bright any money.

Where can I check the Bright v. Kalshi docket?

Search Case No. 2:26-cv-04091 in the Western District of Washington through PACER/ECF.

Sources and Legal References

1. Federal court filings: Bright v. KalshiEX LLC et al., No. 2:26-cv-04091-TL (W.D. Wash.), including Kalshi’s motions filed October 30, 2026 (available through CourtListener)
2. RCW 4.24.070 — Recovery of money lost at gambling
3. RCW 9.46.0237 — Definition of gambling
4. RCW chapter 9.46 — Washington Gambling Act
5. RCW 19.86 — Washington Consumer Protection Act
6. Heitfeld v. Benevolent and Protective Order of Keglers, 36 Wn.2d 685 (1950)
7. Hangman Ridge Training Stables, Inc. v. Safeco Title Insurance Co., 105 Wn.2d 778 (1986)
8. 7 U.S.C. § 2 — Commodity Exchange Act, CFTC jurisdiction
9. 7 U.S.C. § 7a-2 — Event contract provisions
10. 17 C.F.R. § 40.11 — Review of event contracts
11. Federal Rule of Civil Procedure 12 — defenses and motions to dismiss
12. State of Washington v. KalshiEX LLC, King County Superior Court No. 26-2-10264-3 SEA

Update log: November 10, 2026 — Article published. Docket reviewed through November 2, 2026; motion to dismiss and stay pending.

This article is for informational purposes only and does not constitute legal advice or financial advice. Laws vary by state and individual circumstances differ. For advice about your specific situation, consult a qualified attorney. The allegations in the complaint have not been proven in court. AllAboutLawyer.com is an independent legal-information website, not a law firm, and does not represent anyone in this lawsuit.

Researched and written by Israr Ahmad, legal content researcher and founder of AllAboutLawyer.com. All facts verified against the federal docket and filings in Case No. 2:26-cv-04091, the Revised Code of Washington, the Commodity Exchange Act and the court records and reporting cited below, as of November 10, 2026. Last Updated: November 10, 2026.