Washington’s gambling authority has released a public notice warning residents that event-based contracts offered by online prediction markets fall outside the gambling activities permitted in the state. The Washington State Gambling Commission issued the guidance on December 9, 2025, citing growing public interest in these markets and clarifying that “offering events-based contracts or participating in these markets is not authorized in Washington State.”
The advisory addresses consumers rather than any particular operator. It explains that the commission views prediction markets as outside the scope of state-approved gambling, which currently limits sports wagering to in-person activity on tribal lands. Online sportsbooks can operate only when users are physically present at tribal casino properties. Companies such as FanDuel and DraftKings maintain partnerships with tribal operators, but statewide mobile wagering remains unavailable.
In its letter, the commission acknowledged broader legal questions surrounding prediction markets, noting: “While prediction markets are an unauthorized activity in Washington State, we acknowledge that the future of prediction markets, including those for sports, political events, etc., remains a subject of ongoing litigation both federally and in other states.”
Expansion of Fanatics Markets Draws Regional Attention
Although the commission did not target any specific firm, the advisory arrives as Fanatics moves rapidly into the event-contract space. The company’s prediction market platform went live in ten states last week and has since grown to 24, none of which overlap with the states where Fanatics operates licensed sports betting. Fanatics built its new product through a partnership withCrypto.com and by acquiring Paragon Global Markets, an introducing broker able to host contracts from a designated contract market such as Crypto.com or Kalshi.
Fanatics does not run licensed sports betting in Washington. However, regulators in Arizona, Illinois, and Nevada have already warned licensees that offering sports-related contracts in jurisdictions where they are deemed illegal—or partnering with entities that do—could influence a company’s regulatory standing. Fanatics holds sports wagering licenses in Arizona and Illinois but not Nevada, raising the possibility that Washington’s position could have effects beyond state borders. The Washington notice, however, functions only as a caution and does not constitute enforcement action. At publication time, Fanatics had not provided a statement in response to inquiries.
Previous Enforcement Provides Background
The commission’s new guidance does not include immediate sanctions, and officials have not taken recent legal action against prediction market operators active in the state. Nonetheless, Washington has prior experience regulating the sector. In 2021, the commission issued a cease and desist order to Polymarket for accepting U.S. customers at a time when the platform was not permitted to do so. The Commodity Futures Trading Commission later imposed a $1.4 million civil penalty on Polymarket for failing to register as a swap execution facility. Polymarket withdrew from the U.S. market the following year before resuming activity earlier this month.
While the commission reiterates that prediction markets lack authorization today, it also underscores that ongoing court proceedings may influence the path ahead. For now, the agency advises residents to rely on approved tribal-casino sportsbooks for legal wagering within Washington.
Source:
“Washington State Gambling Commission Statement”, resources.sbcamericas.com,December 9, 2025
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