Utah Wins Court Battle Against Kalshi, Can Continue Enforcing Gaming Laws

A federal court has allowed Utah to continue enforcing its gaming laws against Kalshi. A Court of Appeals denied Kalshi's request for an injunction, allowing the state to apply local gaming laws to Kalshi's offer. This decision comes as Kalshi faces similar legal challenges in other states, including Iowa, where a federal judge also allowed the state to regulate Kalshi's local offer under state gaming laws.

Kalshi argued that it operates as a contract market regulated under the Commodity Futures Trading Commission, making it immune to local gaming laws. The exchange claimed it would suffer irreparable harm if subject to state gaming laws instead of the Commodity Exchange Act and federal oversight. Kalshi also insisted that gaming regulators were attempting to preempt federal regulation.

The current decision by the Court of Appeals follows a previous decision by U.S. District Judge Robert J. Shelby, who also sided with the state. For the time being, Kalshi will be subject to enforcement from the state’s gambling regulators. The question of whether sports event contracts are a form of gambling could ultimately be resolved by the Supreme Court of the United States.