The U.S. 10th Circuit Court of Appeals has denied Kalshi’s emergency motion for an injunction pending appeal, allowing Utah to enforce its gambling laws against the prediction market operator and potentially take legal action over its sports event contracts.
The ruling marks another legal setback for Kalshi, which sued Utah in February seeking to prevent the state from enforcing its anti-gambling laws against the company’s event contracts.
The appeals court’s decision came a little more than one month after U.S. District Judge Robert J. Shelby rejected Kalshi’s request for a preliminary injunction.
In denying the emergency motion, the 10th Circuit said Kalshi had not shown that the factors required for an injunction weighed in its favor, including the likelihood of success on appeal, the threat of irreparable harm, the potential harm to opposing parties and the public interest.
“Kalshi has not shown these factors weigh in its favor. Accordingly, we deny its motion,” the court said.
Kalshi initiated legal action against Utah in February after alleged comments from Gov. Spencer Cox and Attorney General Derek Brown, in which the two publicly expressed opinions that Kalshi was operating illegally under Utah’s anti-gambling laws and would likely take legal action against the company for its offerings.
Kalshi cited comments from Cox in a Bloomberg article, in which the governor said: “I think you’re going to see 50 states suing these guys in one way or another.”
Cox also said businesses such as Kalshi were “illegal in Utah and will continue to be so.”
Kalshi also pointed to an op-ed by Brown in Deseret News, in which the attorney general referred to the company by name and said he had a plan to address prediction markets operating in Utah.
The company said it had attempted to contact Utah’s attorney general to determine whether the state was preparing to take action over its prediction market services, but that its inquiries were not returned.
The 10th Circuit’s ruling now leaves Kalshi and its sports event contracts susceptible to enforcement under Utah’s gambling laws.
The development follows similar proceedings in Connecticut. State officials filed a lawsuit in late August seeking to stop Kalshi from offering what they described as illegal, unlicensed sports betting after a court denied the company’s emergency request for an injunction pending appeal.
That decision allowed Connecticut’s attorney general to pursue a civil enforcement action against Kalshi.
In that case, Connecticut also sought an ex parte temporary restraining order that would have immediately required Kalshi to stop offering its sports event contracts in the state. A Connecticut Superior Court denied the request on the same day the lawsuit was filed.