Kalshi's appeal against John Martin, Director of the Maryland State Lottery and Gaming Control Agency (MSLGCA), has begun in the US Court of Appeals for the Fourth Circuit.
Maryland was one of many states in which Kalshi was served a cease and desist with regards to its sports prediction contracts - it has so far been the only state to back that up with a rejection of Kalshi's request for a preliminary injunction against the state regulator.
The operator fears that having to geo-block in a state would undermine the profitability and technical capacity of the company to do so, not to mention the precedent it would set other state gaming regulators.
To prevent this, Kalshi appealed the district court's decision the same day the injunction was rejected, August 1 - in the appeal's opening brief, it explains why it believes that District Court erred in its application of the 'presumption against pre-emption' principle.
This judicial doctrine means that those distributing justice should presume that federal lawmakers did not mean to undermine or pre-empt state law, unless explicitly stated, which was precisely the point that Kalshi made and has successfully argued in New Jersey and Nevada, where it was granted an injunction.
In its brief, Kalshi goes on to refute this decision as being based on speculation and ignoring the explicit legislation governing exchanges that would necessitate equal and fair access across all 50 states.
The briefing claims: "If Maryland could enforce its laws against Kalshi, so could 49 other states, subjecting Kalshi to a patchwork of contradictory regulation, interfering with the CFTC's uniform oversight, conflicting with Kalshi's federally imposed obligation to provide impartial access to its exchange, and resulting in total chaos."
The case will now continue with the MSLGCA giving its own brief - if Kalshi wins, the case may return to the District Court. If Kalshi loses, it may be forced to petition the Supreme Court.
When initially refusing Kalshi's attempt to acquire a preliminary injunction, Judge Abelson said: "The courts and congress have long recognized states' authority to regulate gambling conducted within their borders"
