10th Circuit Denies Kalshi’s Emergency Motion for Appeal, Allows Utah to Enforce its Gambling Laws

• Kalshi underwent another legal defeat, as the U.S. 10th Circuit Court of Appeals denied the company’s emergency motion for injunction pending appeal
• U.S. District Judge Robert J. Shelby previously denied Kalshi’s motion for a preliminary injunction in the state
• Utah is now free to enforce its gambling laws against the prediction market operator

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The U.S. 10th Circuit Court of Appeals today denied Kalshi’s emergency motion for injunction pending appeal, essentially now allowing Utah to enforce its gambling laws against the company.

The U.S. Circuit Court of Appeals denial came a little more than one month after U.S. District Judge Robert J. Shelby denied Kalshi’s motion for a preliminary injunction after the prediction market operator filed a lawsuit earlier this year to prohibit the state from enforcing its anti-gambling laws against its event contract offerings.

The denial will now allow Utah to take legal action against Kalshi and its sports event contracts if it chooses to do so.

Factors Did Not Weigh in Kalshi’s Favor

The 10th Circuit Court of Appeals, in its decision, noted Kalshi did not effectively show a likelihood of success on appeal, the threat of irreparable harm if the injunction was not granted, the absence of harm to opposing parties if the injunction wasn’t granted, and any risk of harm to the public interest.

“Kalshi has not shown these factors weigh in its favor. Accordingly, we deny its motion,” the court noted.

Kalshi initiated legal action action against the state in February following alleged comments from Gov. Spencer Cox (R) and Attorney General Derek Brown, in which the prediction market company said the two publicly expressed opinions that Kalshi was operating illegally under Utah’s anti-gambling laws and would likely take legal action against the company for its offerings.

Kalshi noted multiple times in its lawsuit against that it is taking action before the state can take legal action against the company. Kalshi pointed to recent comments made by Gov. Cox in a Bloomberg article in which he said “I think you’re going to see 50 states suing these guys in one way or another” and that businesses like Kalshi are “illegal in Utah and will continue to be so.”

They also expressed concern over a recent op-ed written by Brown in Deseret News, in which the attorney general reference Kalshi by name and “stated he has a plan to address prediction markets operating in the state.” The lawsuit also believes that Brown’s views in the op-ed clearly show he believes their offerings to be illegal.

Kalshi, in the lawsuit, claimed it tried to contact Utah’s attorney general to inquire if the state was preparing to take action against the company for its prediction market services, but its inquiries were never returned.

Now Susceptible to Utah Gaming Laws

The denial of the appeal now leaves Kalshi and its sports event contracts susceptible to Utah gaming laws.

In similar circumstances, states have wasted little time to file legal action. Connecticut officials filed a lawsuit in late August to prohibit Kalshi from offering markets it claims are illegal, unlicensed sports betting in the Constitution State.

The U.S. District Court District of Connecticut had recently denied Kalshi’s motion for an emergency injunction pending appeal, which allowed Connecticut’s Attorney General to file the civil enforcement action against the prediction market operator.

In its lawsuit, Connecticut filed for an ex parte temporary restraining order against the prediction market operator. The Connecticut Superior Court denied the motion for an ex parte temporary restraining order on the same day the lawsuit was filed.

If it had been approved, Kalshi would have immediately been ordered to cease its sports event contracts in the state.