Kalshi Loses in Montana Because It Kept Agreeing to Pause the Case

Judge Donald W. Molloy refused a preliminary injunction on irreparable harm, holding that repeatedly agreeing to stay the case fatally undermined the claim of urgency. Connecticut lost its emergency application the same week.

• Judge Donald W. Molloy of the United States District Court for the District of Montana denied Kalshi's motion for a preliminary injunction on Thursday, without prejudice, on the ground that the exchange had not shown irreparable harm is likely rather than merely possible
• Molloy wrote that "Kalshi's repeated agreement to stay this matter for months at a time fatally undermines its ability to make such a showing", the stay having been extended in April, June and again sought in August
• The court also refused a joint motion for a third 60-day stay, recording that neither party had provided a status update or shown good cause by 21 August, and ordered Montana to respond to the original complaint within 21 days
• Montana becomes the tenth state cleared to seek to ban or restrict the sports event contracts; federal judges in Michigan, Nevada and Washington have already blocked them, with geofences live in Nevada and Michigan and Washington due on 2 September
• Separately, the Connecticut Superior Court refused the state's application for an ex parte temporary restraining order the same day Connecticut filed its own suit, so neither side has secured an emergency remedy

A Procedural Defeat That Is Really About Tactics

Kalshi sued Montana authorities on 12 April 2026, after a second cease and desist letter. Its complaint recorded that following an initial letter dated 25 March 2025 the exchange and the state had agreed to hold enforcement while another federal court considered similar letters issued by Nevada regulators, and stated that Kalshi feared Montana might be preparing criminal charges. No charges have been brought. The legal argument was the familiar one, that the Commodity Exchange Act pre-empts state gambling law.

Then the case stopped moving. On 22 April both parties filed a joint stipulated motion to stay judicial deadlines. They sought and obtained a 60-day extension on 22 June, and asked again on 21 August. According to the court, neither side filed a status update by that date or made any good cause showing for a third stay, and the request was refused for that reason.

The injunction ruling follows from the same facts. A preliminary injunction requires the applicant to show that irreparable harm is likely, not simply possible, and Molloy held that an exchange which had repeatedly agreed to pause its own case for months at a time could not credibly claim it faced imminent and unavoidable injury. The denial is without prejudice, so Kalshi can return to the question as the case develops.

The wider board moved this week too. In Connecticut, Kalshi appealed to the Second Circuit on 17 August and its federal case is now held until 21 days after that court rules, while the state opened a second front in the Superior Court. Minnesota has a calendar, with the parties to meet and report by 6 October and a pretrial conference on 13 October. New Jersey faces a 3 September deadline to petition the Supreme Court for certiorari.

Agreeing to a Stay Is a Concession About Urgency, and It Was Made Four Times

This is the most instructive ruling against Kalshi so far, because it does not turn on the Commodity Exchange Act at all. Molloy did not decide whether sports event contracts are swaps, whether federal law pre-empts Montana, or whether the exchange is running unlicensed gambling. He decided that a party cannot spend sixteen months consenting to delay and then assert that it will suffer irreparable harm without immediate relief. That is a self-inflicted wound and a predictable one. Stays were tactically attractive while the exchange waited to see how Nevada and other cases resolved, but every agreed pause is a statement on the record that nothing terrible happens if the matter waits. The exchange has been running a strategy of buying time in a great many jurisdictions at once, and in Montana the bill for it arrived.

Neither Side Got Its Emergency Remedy This Week, Which Favours Kalshi in the Short Run

It would be easy to read the week as uniformly bad for the exchange. It was not. Connecticut asked the Superior Court for an ex parte restraining order that would have banned the contracts without Kalshi even responding, and the court refused, which is the ordinary outcome for so drastic a remedy but a refusal nonetheless. The practical position is that Kalshi is still trading in Connecticut while both the state application and the removal request proceed, and it is still trading in Montana while the state prepares a response it now has three weeks to file. For a business whose commercial exposure is measured in revenue booked before any ban lands, delay has value in itself. That is precisely why the disgorgement claims now being pleaded matter more than the injunctions.

Ten States Is No Longer a Trend, It Is the Weather

Montana is the tenth state authorised to move against the products, and three federal judges have already blocked them outright. At that point the individual rulings stop being newsworthy on their own and start describing a settled pattern in which the exchange loses the state-level skirmishes and stakes everything on the appellate question. That is a coherent strategy, since the Second Circuit and ultimately the Supreme Court will decide whether the Commodity Exchange Act displaces state gambling law, and every district-level loss is survivable if that answer comes back favourable. The risk is arithmetic. Geofences are already up in Nevada and Michigan, Washington follows on 2 September, and each exit removes revenue while the appeals run on their own timetable.

Montana did not rule on whether these contracts are legal. It ruled that a company in no hurry cannot demand emergency relief, which is a lesson with a much wider application.