Federal judge rejects Kalshi injunction bid in Utah, upholds state gambling enforcement

August 5, 2026  ·  2 min read

U.S. District Court Judge Robert Shelby on Tuesday granted summary judgment to Utah, ruling that federal commodities law does not prevent the state from enforcing its gambling statutes against Kalshi. The decision comes after the prediction markets company argued that the Commodity Exchange Act (CEA) gives federal regulators exclusive authority over its operations.

In his ruling, Shelby called Kalshi’s interpretation of the Dodd-Frank Act “implausible,” writing that the company’s claim that language changes in the law allow for federal preemption defies Congressional intent. “Kalshi concedes gambling is a field that has been traditionally regulated by the states, not the federal government,” the judge wrote.

Shelby pointed to Supreme Court precedent establishing that Congress has supported state gambling regulation since the early 19th century. “It is simply implausible that Congress would silently reverse course through an Act addressing the 2008 housing financial crisis,” he wrote.

Dual compliance deemed possible

The judge also rejected Kalshi’s argument that complying with both federal requirements and state gambling laws would be impossible. Kalshi had claimed that subjecting it to state-by-state regulations “would make operating a designated contract market functionally impossible.”

Shelby found the argument unconvincing. “Kalshi has not explained why or how it would be impossible to manage different state requirements,” he wrote, noting that the company’s event contracts already contain appendices of trading prohibitions specific to individual groups. “Adding an additional category of prohibited participants in a sports-related event contract does not appear to be onerous.”

Part of broader state enforcement wave

The Utah ruling extends a streak of unfavorable decisions for prediction markets operators. On Friday, New York Attorney General Letitia James filed suit against Kalshi seeking $36 billion and the shutdown of the company’s operations in the state. The filing came immediately after courts denied Kalshi’s requests to prevent the New York State Gaming Commission from enforcing an October 2025 cease-and-desist order.

Earlier this month, a federal judge in New York similarly rejected Kalshi’s bid to block state gambling enforcement, ruling that the company’s reliance on federal commodities law does not preempt state oversight.

Utah Governor Spencer Cox publicly opposed the Commodity Futures Trading Commission in February after CFTC chair Michael Selig announced actions defending prediction markets. “I don’t remember the CFTC having authority over the ‘derivative market’ of LeBron James rebounds,” Cox wrote. “These prediction markets you are breathlessly defending are gambling, pure and simple.”

Days after Cox’s statement, Kalshi filed suit to block anticipated enforcement action by Utah. Utah law does not permit any form of gambling.

If Kalshi appeals the Utah decision, the case would go to the Tenth Circuit Court of Appeals, which covers Colorado, Kansas, Oklahoma, New Mexico, Utah and Wyoming. The Sixth Circuit Court of Appeals heard oral arguments last week in a combined consideration of opposing federal court decisions in Ohio and Tennessee cases involving similar state enforcement questions.