Kalshi went to federal court in Montana on Tuesday (April 21), asking a judge to stop state officials from using gambling laws against its federally regulated prediction market. The company says Montana is trying to shut down trading activity that falls under the sole authority of the U.S. Commodity Futures Trading Commission.
The filing seeks a preliminary injunction in the U.S. District Court for the District of Montana. On the same day, Kalshi also filed an unopposed request to pause case deadlines while both sides continue discussions. Defendants include Attorney General Austin Knudsen, the Montana Gambling Control Division, and other state officials.
NEW: Kalshi sues Montana officials, claiming state crackdown on event contracts violates federal authority over derivatives markets #PredictionMarkets @RWW pic.twitter.com/K6RIjpB4Xk
— Suswati Basu (@suswatibasu) April 13, 2026Kalshi told the court state officials are “unconstitutionally threatening to prohibit trading on Kalshi’s federally designated contract market,” even though its contracts are “federally authorized” and Congress granted the CFTC “exclusive jurisdiction” over designated contract markets.
Kalshi runs a federally licensed exchange offering event contracts. The contracts let users trade on whether future events will happen, from economic data to elections and sports outcomes. The company argues those products are derivatives governed by federal commodities law, not sports wagers or gambling products controlled separately by each state.
According to the complaint, Montana regulators decided Kalshi’s offerings in the state “constitute illegal gambling” under Montana law and ordered the company to stop offering contracts to residents. The state warned that it “expect[ed]” Kalshi to “voluntarily comply” and that “[r]efusal to do so will result in legal action against Kalshi.”
Why Kalshi is asking for a preliminary injunction against Montana
Kalshi said Montana had previously agreed to a standstill in April 2025. Under that deal, the Gambling Control Division said it would “not initiate any civil or criminal enforcement against Kalshi during the pendency of” related Nevada litigation and would “defer any enforcement pending the outcome of the proceedings before Chief Judge Gordon in Nevada and any appeal to the Ninth Circuit.”
The company says those Nevada proceedings were still active when Montana sent a new cease-and-desist letter dated April 6, 2026. Kalshi says it received that letter on April 11, asked officials for clarification, but “received no response and filed the Complaint.”
In its latest brief, Kalshi argued Congress built a national framework for exchanges like its own, and letting states block trading one by one would break that system. The company cited legislative history saying that “different State laws would just lead to total chaos.”
The Montana case follows similar fights around the country. Kalshi has recently pointed to favorable rulings in New Jersey, Arizona, and Tennessee, where judges found the company was likely to succeed on arguments that federal commodities law preempts state gaming enforcement. It has also sued Iowa while challenging similar state actions elsewhere.
Kalshi says immediate relief is needed because Montana’s newest letter creates an “imminent threat” of enforcement. It asked the court to stop officials from enforcing Montana gambling statutes or “any other Montana law that attempts to regulate Kalshi’s exchange” while the lawsuit moves ahead.
Featured image: Kalshi / Canva
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