Key facts
- Kalshi lost its bid for an emergency injunction pending appeal in its case against Utah.
- The 10th Circuit Court of Appeals denied Kalshi's motion.
- Utah can now enforce its anti-gambling laws against the prediction market platform.
- A federal judge previously ruled that Utah's anti-gambling laws apply to Kalshi's sports contracts.
- States have a high success rate in court rulings against prediction markets.
Prediction market platform Kalshi has lost its bid to obtain an emergency injunction pending appeal in its legal battle with Utah. The 10th Circuit Court of Appeals denied the platform's motion, which was intended to prevent Utah from initiating civil or criminal actions during the appeal process.
This ruling allows Utah to proceed with enforcing its anti-gambling laws against Kalshi. A previous federal judge's decision had already determined that the state's laws apply to Kalshi's sports betting contracts. The denial represents a significant setback for prediction market platforms in their ongoing disputes with state regulators.
Regulators contend that these platforms operate as unlicensed sports betting services, while platforms like Kalshi argue that their offerings are classified as swaps under the exclusive jurisdiction of the CFTC. The Supreme Court's potential involvement is being closely watched, with New Jersey having filed a petition to address state jurisdiction over sports prediction markets.
Legal expert Daniel Wallach noted that states have achieved a strong track record in court, winning 12 consecutive federal rulings against prediction markets since the Minnesota decision. Overall, states have prevailed in approximately 85% of court rulings concerning preliminary injunctions, temporary restraining orders, or stays pending appeal. Data from Polymarket suggests crypto traders place only a 31% chance on the Supreme Court accepting such a case by year-end.