A federal judge has restarted Kalshi’s lawsuit against Montana officials after months of delays, while rejecting the prediction-market operator’s bid for immediate protection from state enforcement.
U.S. District Judge Donald W. Molloy refused another request from both sides to pause the case and gave Montana 21 days to answer or otherwise respond to Kalshi’s complaint. “No extensions of time will be granted,” Molloy wrote in the August 27 order. The judge also denied Kalshi’s preliminary injunction request without prejudice.
Kalshi brought the case on April 12 against Montana Attorney General Austin Knudsen and other state officials. The company says Montana “intru[ded] into the federal government’s exclusive authority to regulate derivatives trading on exchanges overseen by the Commodity Futures Trading Commission.” It wants declaratory relief along with preliminary and permanent injunctions.
Kalshi’s event contracts allow customers to trade on real-world outcomes including economic data, elections and sports. The company operates a federally regulated exchange and argues those contracts fall under federal derivatives law rather than individual state gambling rules.
Montana’s Gambling Control Division took a different view. An April 6 cease-and-desist letter said Kalshi’s activities amounted to illegal gambling under state law and warned of possible enforcement. Kalshi filed suit after receiving the letter and later sought an injunction.
Nine days after starting the lawsuit, Kalshi asked Molloy for preliminary relief. On that same day, however, both sides jointly requested that court deadlines be paused.
Kalshi delays weaken case against Montana enforcement as preliminary injunction bid denied
Molloy approved the first pause on April 22, with an update due June 22. The parties then sought another 60 days, which he granted. When the next deadline arrived August 21, they requested a third stay rather than providing the required status update.
It offered little explanation beyond saying the parties “have conferred and believe a further continuation of the stay is appropriate.”
Molloy said that was not enough. Federal procedural rules require requests for court orders to “state with particularity the grounds for seeking the order.”
With no specific justification supplied for another delay, Molloy found the parties had failed to establish good cause. He lifted the stay and said a preliminary pretrial conference would be scheduled separately.
Those repeated pauses also worked against Kalshi’s injunction request. To secure preliminary relief, the company needed to show, among other factors, that irreparable harm was likely without court intervention rather than merely possible.
Molloy found Kalshi’s litigation choices difficult to square with its claim that urgent intervention was necessary.
“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,” Molloy wrote.
The denial is without prejudice, leaving Kalshi able to revisit the issue. For now, the broader federal-state fight over who can regulate its prediction contracts will proceed, and Montana must respond within 21 days.
Featured image: Kalshi / Canva
The post Montana judge ends Kalshi lawsuit stay, rejects preliminary injunction request again appeared first on ReadWrite.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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