Kalshi has sued Montana, arguing that the state went back on a prior agreement with the prediction market by sending a new cease-and-desist letter last week and was about to bring criminal charges against the business.
Kalshi filed the lawsuit Sunday in the U.S. District Court for the District of Montana.
Kalshi-MT-lawsuitAccording to the filing, the state first sent Kalshi a cease-and-desist in March 2025. The filing says that Kalshi and the state reached an agreement to pause enforcement while federal courts in Nevada looked into the legality of similar cease-and-desists.
At the time of the 2025 agreement, Kalshi had won an injunction against Nevada, preventing it from enforcing its own cease-and-desist. In November, a judge dissolved that injunction. That cleared the path for the Nevada Gaming Control Board to sue Kalshi in state court, and it successfully banned Kalshi’s sports event contracts from the state in March.
That original agreement was outlined in an email, attached as an exhibit to the court, sent by Kalshi lawyer Will Havemann to authorities in Montana. In that email, he said that “Montana authorities agree to preserve the status quo and not initiate any civil or criminal enforcement against Kalshi during the pendency of the Nevada litigation.”
However, the complaint says that Montana then followed up with a new cease-and-desist on April 9, which Kalshi’s lawyers said the business understood to be a threat that it “may face criminal prosecution in Montana for offering its event contracts.”
The new cease-and-desist, sent by Jeremy S. Craft of the state’s Department of Justice, said that the previous agreement had been “based on” the injunction in the Kalshi-Nevada case still being in effect.
Kalshi says state law is preempted
Besides the points around its agreement with the state, Kalshi’s complaint largely makes similar arguments that the prediction market has advanced in other lawsuits.
It says that as a designated contract market regulated by the Commodity Futures Trading Commission, Kalshi is not subject to state sports betting laws, as it argues that these are preempted by federal law.
Courts have been divided on these arguments, leading to speculation that ultimately the matter will have to be settled by the Supreme Court.
