A federal judge in Montana has denied KalshiEX’s request for a preliminary injunction against state gambling enforcement, as a separate lawsuit from Connecticut adds to the prediction market operator’s expanding regulatory disputes across the US.
US District Judge Donald W Molloy denied Kalshi’s preliminary injunction motion on 27 August and rejected a joint request from Kalshi and Montana to further extend a stay in the proceedings.
The case was filed in April after Montana authorities issued cease-and-desist notices concerning Kalshi’s sports event contracts. Kalshi argues its contracts are regulated under the Commodity Exchange Act (CEA) through the Commodity Futures Trading Commission (CFTC), preventing states from separately applying gambling laws.
Molloy did not resolve that underlying preemption dispute. Instead, the court found Kalshi had not sufficiently demonstrated a likelihood of irreparable harm while seeking an injunction, with its previous agreements to keep the litigation stayed weighing against its position.
The motion was denied without prejudice, allowing Kalshi to seek relief again.
The decision follows another escalation in Connecticut, where Attorney General William Tong, Governor Ned Lamont and the Department of Consumer Protection have sued Kalshi seeking an injunction against its sports event contracts.
Connecticut alleges the contracts amount to unlicensed sports wagering under state law.
Connecticut's action follows a December 2025 cease-and-desist order covering Kalshi and two other platforms. Kalshi challenged that enforcement in federal court, but District Judge Vernon D Oliver denied its preliminary injunction earlier this month, concluding that Kalshi had not demonstrated a likelihood of success on its preemption claim. Kalshi has appealed to the Second Circuit.
The dispute has also drawn direct federal intervention. The CFTC sued Connecticut, Arizona and Illinois in April, arguing that state attempts to regulate event contracts interfere with its exclusive federal authority.
The legal landscape remains divided. Courts in Utah, Michigan, Nevada and Washington have permitted or imposed restrictions affecting Kalshi, while litigation elsewhere has produced outcomes more supportive of federal oversight.
Earlier this month, Kalshi sought emergency injunctive relief in Utah after a federal judge allowed the state to enforce its gambling laws against prediction market operators. The case is among several appeals that could further define the boundary between CFTC jurisdiction and state gaming regulation.
Connecticut permits regulated sports betting through the Mashantucket Pequot Tribal Nation, Mohegan Tribe and Connecticut Lottery Corporation, while Kalshi does not hold a state sports wagering licence
