Kalshi Loses Utah Court Bid, Clearing Way for State to Enforce Anti-Gambling Laws

Prediction market platform Kalshi has lost its bid to get an emergency injunction pending appeal in its case against Utah. This now paves the way for the state to enforce its anti-gambling laws in the latest blow to prediction markets in their fight against state regulators.

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Court Denies Kalshi’s Motion For Injunction Pending Appeal

In an X post, legal expert Daniel Wallach said the 10th Circuit Court of Appeals denied the prediction market platform’s emergency motion for an injunction pending appeal. The platform had notably filed this motion to prevent Utah from filing a civil or criminal action against it during the appeal process.

With the court ruling, Utah can now enforce its anti-gambling laws against Kalshi, Wallach noted. A federal judge last month ruled against the prediction market platform in its case against Utah, stating that the state’s anti-gambling laws apply to the platform’s sports betting contracts and reaffirming the state’s summary judgment in the lawsuit Kalshi initially filed earlier this year.

The denial of Kalshi’s motion is another setback for prediction market platforms in their fight against state regulators. These regulators have so far argued that prediction market platforms operate as unlicensed sports betting platforms with their sports contract offerings and that these sports contracts fall under their jurisdiction.

However, platforms such as Kalshi argue that the CFTC has exclusive jurisdiction over these sports contracts as they classify as swaps. The Supreme Court is set to intervene, as New Jersey has filed a certiorari petition questioning whether states have jurisdiction over sports prediction markets.

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States Having The Upper Hand At The Moment

Wallach pointed out that since the Minnesota decision, states have now won 12 consecutive federal court rulings against prediction markets. A federal judge granted a preliminary injunction blocking the state’s prediction market ban just days before it was to take effect.

However, since then, courts have ruled against Kalshi and other prediction markets, including a 9th Circuit Court of Appeals ruling that sports contracts are sports bets. “Overall, States have prevailed on 35 out of 41 court rulings involving requested preliminary injunctions, TROs, or stays/injunctions pending appeal, an 85% success rate,” the legal expert noted.

Despite New Jersey’s petition, crypto traders are currently betting that the Supreme Court won’t accept a sports event contract case anytime soon. Data from the top crypto prediction market platform Polymarket shows only a 31% chance that the top court would accept such a case by year-end.