Kalshi's Courtroom Losing Streak Deepens as States Win 86 Percent of Rulings

For Kalshi, the legal fight over sports event contracts has become a numbers game.

Since the company's victory in Minnesota, Kalshi has lost 14 consecutive federal court rulings, according to the latest tally of preliminary injunctions, temporary restraining orders, and stays or injunctions pending appeal. Across the broader litigation, states have prevailed in 37 of 43 such rulings, an 86% success rate.

The numbers do not settle the underlying legal question. Federal courts have reached different conclusions about whether the Commodity Exchange Act preempts state gambling laws, and Kalshi has won important rulings along the way. The Third Circuit, for example, affirmed a preliminary injunction protecting Kalshi from New Jersey enforcement after finding that Kalshi had shown a reasonable chance of success on its federal preemption argument.

Still, the recent sequence of decisions has created a clear pattern at the preliminary-relief stage.

The Minnesota Win Was a Turning Point

The Minnesota case produced one of Kalshi's most significant victories.

On July 27, a federal judge granted preliminary injunctions sought by Kalshi, Polymarket US and the federal government in related cases involving Minnesota's restrictions on prediction-market contracts.

That decision came after months of litigation in which Kalshi had argued that its contracts fall under federal commodities law and that state gambling regulations cannot be applied to its federally regulated exchange.

The Minnesota ruling did not end the broader fight. Instead, it became a dividing line in the case history. The 14 rulings that followed, according to the supplied tally, have gone against Kalshi.

States Have Won Most Preliminary Battles

The broader numbers show how difficult the preliminary-relief stage has been for prediction-market operators.

States have prevailed in 37 of 43 rulings involving preliminary injunctions, TROs, or stays and injunctions pending appeal, according to the tally provided for this analysis.

That represents an 86% success rate for the states at this particular stage of the litigation.

The figure should not be read as a final scorecard of the underlying lawsuits. Preliminary injunctions and emergency orders are decided under different standards from a final judgment on the merits. A ruling denying preliminary relief also does not necessarily determine every issue that will eventually reach trial or appeal.

That distinction is important because the cases have produced decisions in both directions.

The Courts Have Not Spoken With One Voice

Kalshi has won meaningful relief in federal court.

The Third Circuit's decision in KalshiEX LLC v. Flaherty affirmed a preliminary injunction after concluding that Kalshi had demonstrated a reasonable chance of success on its argument that the Commodity Exchange Act preempts the New Jersey gambling laws at issue.

Other courts have reached different conclusions.

In Arizona, a federal judge ultimately granted the federal government's preliminary injunction while dissolving an earlier TRO, although the same court had previously denied Kalshi's own request for preliminary relief. The court described the broader litigation as divided and noted the existing appellate decision in Flaherty.

Utah produced another setback for Kalshi in August. The federal court concluded that the CEA did not preempt Utah's anti-gambling laws and granted the state's motion for summary judgment.

Then came the Ninth Circuit's August ruling in KalshiEX LLC v. Assad. The appeals court affirmed in part the dissolution of a preliminary injunction in Kalshi's Nevada dispute, holding that Kalshi had not shown that the CEA preempts Nevada's gaming regulations as applied to its sports event contracts.

The result is a legal landscape that remains divided even as the recent preliminary rulings have tilted toward the states.

The Central Question Is Still Preemption

At the center of almost every case is the same basic question.

Kalshi argues that its sports event contracts are financial products traded on a designated contract market regulated by the Commodity Futures Trading Commission. From that position, it argues that the federal Commodity Exchange Act limits the ability of individual states to apply their gambling laws to those contracts.

States have taken the opposite position. They argue that sports event contracts function as sports betting and fall within traditional state authority to regulate gambling.

The conflict has produced a growing collection of federal decisions, with courts examining the same federal statutes through different factual and legal frameworks.

The Ninth Circuit's August ruling shows how significant the disagreement remains. The court rejected Kalshi's argument that CFTC regulation alone prevented Nevada from applying its gaming laws to the company's sports contracts.

What the Numbers Do and Do Not Show

The 37-of-43 figure is striking, but it needs to be kept in context.

It measures rulings on preliminary injunctions, TROs and related stays or injunctions pending appeal. It does not mean states have won 37 final judgments against Kalshi. It also does not erase Kalshi's victories, including the Third Circuit's ruling in New Jersey.

The 14 consecutive losses cited after Minnesota likewise describe a sequence of rulings rather than a final determination of the legality of Kalshi's business model.

What the numbers do show is the direction of the litigation at the preliminary-relief level.

As more states challenge sports event contracts, Kalshi has increasingly been required to defend the same federal preemption theory in different courts. The resulting decisions have become an important part of the larger debate over where federal commodities regulation ends and state gambling authority begins.

For Kalshi, the next phase of the fight will depend less on the raw number of preliminary rulings than on which issues ultimately reach the federal appellate courts and, potentially, the Supreme Court.