A federal appeals court won't stop Utah from enforcing its anti-gambling law against Kalshi while the prediction-market company fights the case on appeal.
In a brief order Tuesday, a two-judge panel of the 10th U.S. Circuit Court of Appeals ruled that Kalshi hadn't met the legal standard for an injunction pending appeal. The panel didn't decide the central question in the case—whether federal commodities law overrides Utah's gambling statute when it comes to Kalshi's event contracts. That question is still pending before the court.
Kalshi is a federally regulated exchange where users trade contracts tied to the outcome of real-world events. The company sued Utah officials after the state threatened to enforce its gambling laws against it.
Kalshi says it operates as a designated contract market regulated by the Commodity Futures Trading Commission and that the Commodity Exchange Act gives the CFTC exclusive authority over trading on its platform. Enforcing Utah's law, the company argues, would expose it to civil and criminal liability and force it to choose between complying with the state or following a CFTC order directing it to keep the exchange running. Kalshi also warns that if states can apply their own gambling laws to its contracts, federally regulated markets could end up governed by a patchwork of conflicting rules from state to state.
Attorneys for Utah argue Kalshi is using federal commodities regulation as cover to sidestep a gambling ban the state has long enforced and that the Commodity Exchange Act doesn't strip Utah of its authority to apply gambling laws that hit everyone equally. They argue regulating the public health and social costs of gambling is the responsibility of the state, not the CFTC.
A federal district court in Utah already sided with the state once, denying Kalshi's request for preliminary relief and granting Utah summary judgment. Kalshi appealed that ruling to the Denver-based 10th Circuit.
For now, Tuesday's order leaves Utah free to enforce its gambling laws against Kalshi. The larger question, whether federal law preempts that authority, remains open, and the appeals court hasn't indicated when it will rule.
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