Federal Judge Denies Kalshi’s Motion for Preliminary Injunction in Montana

• A federal judge in Montana has denied Kalshi’s motion for a preliminary injunction against the state
• The judge also denied a stay extension request from both Kalshi and the state
• Judge noted that Kalshi’s repeated agreement to stay the matter undermines its ability to show irreparable harm is likely

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A District Judge for U.S. District Court for the District of Montana Helena Division has denied Kalshi’s motion for a preliminary injunction to prohibit Montana from enforcing its gambling laws against the prediction market operator’s sports event contracts.

Judge Donald W. Molloy today denied Kalshi’s preliminary injunction motion, plus a joint motion from both Kalshi and Montana to extend a stay in the state. Molloy noted in his decision that Kalshi has not shown it will likely suffer from irreparable harm if the preliminary injunction is not granted.

“Kalshi’s repeated agreement to stay this matter for months at a time fatally undermines its ability to make such a showing on the current record here. As a result, Kalshi’s motion for preliminary injunction is denied without prejudice,” he wrote in his decision.

Kalshi Filed Montana Lawsuit in April

Kalshi filed a lawsuit against Montana Attorney General Austin Knudsen, several Montana Gambling Control Division representatives, and a number of other state gaming officials this past April, claiming a cease-and-desist notice from the state intrudes on the federal government’s “exclusive authority to regulate derivatives trading on exchanges overseen by the Commodity Futures Trading Commission (CFTC).”

BREAKING: Montana federal court denies Kalshi’s motion for preliminary injunction following parties’ third joint request for stay, finds Kalshi’s “repeated agreement to stay this matter for months at a time fatally undermines” its ability to make a showing of irreparable harm. pic.twitter.com/WDugez6GPS

— Daniel Wallach (@WALLACHLEGAL) August 27, 2026

According to the lawsuit, Kalshi’s outside counsel met with representatives from the Montana Gambling Control Division in April 2025, coming to non-enforcement agreement with the division agreeing it would “not initiate any civil or criminal enforcement against Kalshi during the pendency of” ongoing litigation between Kalshi and Nevada officials.

However, the Montana Gaming Control Division levied another cease-and-desist letter to the company on April 6, 2026.

“As such, Kalshi faces an immediate threat that Defendants will attempt to enforce Montana’s preempted state laws against it. Montana’s stated intent to prohibit Kalshi from operating intrudes upon the federal regulatory framework that Congress established for regulating the trading of derivatives on federally designated exchanges. The state’s efforts to regulate Kalshi are preempted under principles of express preemption, field preemption, and conflict preemption. This Court should therefore issue both a preliminary and a permanent injunction, as well as grant declaratory relief,” counsel reported in the company lawsuit.

Judge Molloy’s denial of Kalshi’s preliminary injunction motion, and the joint motion to extend a stay in the state, now requires state officials to answer or respond to Kalshi’s complaint within the next three weeks. No time extensions, he noted, will be granted.

Attorney General Knudsen and Montana can now follow suit with other such states as New York and Connecticut who have filed their own lawsuits against the prediction market operator after similar preliminary injunction denials.

Connecticut, New York Latest to Take Action

Connecticut officials this week filed a lawsuit to prohibit Kalshi from offering markets it claims are illegal, unlicensed sports betting in the Constitution State.

Attorney General William Tong, Gov. Ned Lamont (D), and Department of Consumer Protection Commission Bryan T. Cafferelli filed the lawsuit in Connecticut Superior Court against Kalshi this week seeking a court injunction to block the prediction market operator’s sports event contracts from the state.

“Sports event contracts are no different than sports betting and are not magically shielded by federal law from Connecticut’s commonsense consumer protection laws. These laws exist for a reason – to protect minors, to prevent problem gambling, to ensure your money is safe and your personal information is protected. None of that is happening now on Kalshi, and we’re suing to put a stop to it,” Attorney General Tong said in the state announcement.

In addition to a permanent injunction, Connecticut is also requiring disgorgement of all revenues received by Kalshi through its operation of sports event contracts in the state. Also, it is requesting a disgorgement from Kalshi in the amount of all taxes, fees, and contributions which the company, if it were a licensed sports betting operator, would have been obligated to pay out to the state.

New York took a similar tact against the company on July 31, filling a lawsuit that seeks at least $36 billion from the prediction market operator. The lawsuit directed the respondent to pay a penalty of $100,000 for each offer or attempt to offer sports betting or online sports betting in the state without authorization. The suit requires the company to pay the fine, forfeit all gains from its gambling operations in the state, and pay restitution to users.

It also seeks a permanent injunction against the company’s sports event contracts in the state.