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Gaming Edge’s TL;DR
- Kalshi has filed suit in Montana after the state issued a second cease-and-desist order, challenging state regulators’ authority over prediction market contracts.
- The move heightens an ongoing nationwide fight over whether the Commodity Futures Trading Commission or state gaming regulators control these products.
Kalshi filed a lawsuit naming Montana Attorney General Austin Knudsen and representatives of the Montana Gambling Control Division after receiving a cease-and-desist letter on April 6.
The company says this reverses a non-enforcement understanding reached with state officials in April 2025 while Kalshi’s separate litigation with Nevada was pending.
Kalshi’s complaint argues Montana’s action intrudes on the federal government’s “exclusive authority to regulate derivatives” overseen by the Commodity Futures Trading Commission (CFTC), and asks the court for both preliminary and permanent injunctions plus declaratory relief.
The filing frames the dispute using established pre-emption doctrines – express, field, and conflict pre-emption – and follows similar suits Kalshi and other market operators have brought in multiple states.
Lawsuit creates uncertainty for Montana bettors
The case adds short-term uncertainty about access to Kalshi’s event contracts in Montana and potentially other states considering similar enforcement moves against prediction market firms.
If Montana enforces its order, residents might lose access or face restrictions. If Kalshi wins an injunction, it could preserve service availability while the federal-versus-state question is resolved.
For operators, the dispute underscores regulatory risk and potential compliance costs: state regulators want markets to follow licensing, taxation, and consumer-protection rules applied to sports betting, while companies like Kalshi maintain those products fall under the Commodity Exchange Act and the CFTC’s exclusive oversight.
The outcome will influence market access, licensing expectations, and where operators prioritize litigation or regulatory relationships.
Based on reporting by Robert Linnehan for SBD.
