Court Denies Kalshi’s Emergency Bid, Clears Way for Utah Regulators

The US 10th Circuit Court of Appeals denied Kalshi’s emergency motion for an injunction pending appeal in Utah. This effectively clears the way for the state to enforce its gambling laws against the company. Court Rejects Kalshi’s Appeal Kalshi initially sued Utah in early 2026 as the state moved to tighten restrictions on prediction markets. The company argued that Utah lacked authority to regulate contracts traded on an exchange registered with the Commodity Futures Trading Commission (CFTC). The newest ruling comes a few weeks after US District Judge Robert Shelby rejected Kalshi’s request to block enforcement of Utah’s restrictions. According to the Associated Press, Shelby determined that the federal law cited by the platform did not prevent Utah from enforcing its gambling regulations. Following the district court’s ruling, Utah Attorney General Derek Brown said his office intended to enforce state law, while officials continued to evaluate their options. Utah’s rules prohibit proposition betting on events occurring within a game, a category that represents a significant portion of the sports-related products offered by prediction markets. Kalshi challenged Shelby’s earlier ruling and appealed the dispute to the 10th Circuit. Its emergency motion sought temporary protection while the appeal proceeded, rather than asking the appeals court to make a final determination on whether federal derivatives law preempts Utah’s restrictions. However, with the request denied, Utah is free to enforce its laws while the appeal is pending. The appellate court’s decision does not resolve Kalshi’s broader challenge to the earlier ruling. However, it removes the temporary protection the company had sought to shield it from state enforcement. The court’s ruling deals another blow to Kalshi’s legal battle with various state-side regulators. Last week, Kalshi also suffered a setback in Nevada, as the court sided with the state, saying it can apply its gambling laws to the prediction market operator. What Is Kalshi’s Position? According to Kalshi, legal contract markets can only be regulated by the CFTC as opposed to state regulators. The company maintains that its sports products are event contracts or swaps governed by the federal Commodity Exchange Act, rather than wagers subject to state gambling laws. However, state regulators challenge that characterization. In lawsuits and enforcement actions, they have generally argued that contracts tied to game outcomes, player performance, and other sporting events effectively constitute sports betting. As a result, they contend that operators must comply with state requirements governing licensing, age restrictions, and consumer protections. The outcome of that dispute could determine whether Kalshi can offer the same sports-related markets nationwide or must tailor its products to individual states’ gambling laws. If states win the legal dispute, Kalshi could face requirements to geofence certain markets, remove specific products, or obtain licenses in jurisdictions that classify its contracts as wagers. In other recent news about Kalshi, the company suspended a Republican nominee for North Carolina’s 1st Congressional District who was allegedly involved in insider trading.