A federal court judge in Montana Thursday denied Kalshi’s motion for a preliminary injunction, potentially setting the stage for the state to sue the prediction market in state court and shut it down.
So far, federal judges in three states — Michigan, Nevada, and Washington — have banned Kalshi’s sports event contracts. Kalshi has implemented a geofence in Nevada and Michigan, and will do so in Washington on Sept 2 — until then, it uses user addresses to block residents of the state. Montana is now the tenth state granted the authority to seek to ban or restrict Kalshi’s sports event products.
The Montana case, in which Kalshi sued state authorities April 12, been at a standstill for several months after both parties April 22 filed a joint stipulated motion to stay any judicial deadlines. Since then, both parties filed for a 60-day extension on June 22, which was granted, and again on Aug. 21. Per the court, neither party provided a status update by Aug. 21 or “ma[d]e any good cause showing” for requesting a third stay. The court ruled that because of the inaction and lack of argument, it must deny the request, and the state is now required to respond to Kalshi’s original complaint within 21 days.
Because Kalshi has not shown the “irreparable harm is not just possible but is likely,” the court denied without prejudice the motion for a preliminary injunction. U.S. District Court for the District of Montana Judge Donald W. Molloy wrote that “Kalshi’s repeated agreement to stay this matter for months at a time fatally undermines its ability to make such a showing.”
Kalshi could potentially revisit the request for an injunction as the case moves forward.
Kalshi feared criminal charges
Kalshi initially filed the lawsuit in response to a second cease-and-desist letter the state sent. In the complaint, the prediction market wrote that it and the state had agreed after a March 25, 2025 cease-and-desist letter to put a hold on any enforcement as another federal court reviewed a case involving similar cease-and-desist letters sent by Nevada regulators.
Much changed between March 2025 and April 2026, including a Nevada federal judge reversing his decision and ultimately writing that the state could enforce its gambling laws.
In the complaint, Kalshi also wrote that it feared the state of Montana may have been preparing to file criminal charges. So far, the state has not. Kalshi argued in the complaint that the Commodity Exchange Act (CEA) preempts state law.
In other cases …
There has been some movement in the last week in several other cases involving Kalshi and states. Below are some highlights:
Connecticut: Kalshi appealed its case to the Second Circuit Aug. 17, and its U.S. district court case is now on hold until 21 days after the Second Circuit rules. In addition, the state sued Kalshi in state court Thursday, which could ultimately lead to the platform being banned. The state also asked for an ex parte temporary restraining order that would have allowed for a prohibition without a Kalshi response, but the Connecticut State Superior Court denied that request.
Minnesota: A U.S district court judge for the District of Minnesota set the initial calendar for the state’s case with Kalshi. The parties must meet and provide a report of the meeting to the court by Oct. 6, and a pretrial conference is set for Oct. 13.
New Jersey: Attorney General Mary Jo Flaherty requested another extension before filing a petition for the U.S. Supreme Court to consider the case. Per the Fourth Circuit docket, the Supreme Court set a Sept. 3 deadline for the state of New Jersey to file a petition for writ of certiorari. Flaherty’s letter to the court was dated July 24.
Utah: Kalshi appealed its case against the state to the Tenth Circuit after an Aug. 4 district court ruling that the CEA does not preempt state law, and that Utah authorities could enforce its anti-gambling laws on prediction markets. The district court case is closed, and the latest filing in the Tenth Circuit is the state’s Aug. 21 response to a Kalshi motion for a preliminary injunction.
