U.S. District Court Denies Kalshi Injunction Bid, Lifts Stay in Montana Preemption Suit

The U.S. District Court for the District of Montana denied KalshiEX LLC's motion for a preliminary injunction against Montana state officials and lifted a stay that had paused the underlying preemption suit for over four months.

KalshiEX LLC v. Knudsen began in April 2026 when the prediction market operator sued Montana officials, alleging the state intruded on the federal government's exclusive authority under the Commodity Exchange Act to regulate derivatives trading on exchanges overseen by the CFTC. Kalshi sought declaratory and injunctive relief and filed a preliminary injunction motion nine days after the complaint, but the parties immediately stipulated to stay the case, a stay that was twice extended.

The court denied the parties' third stipulated motion to extend the stay, finding they failed to state grounds for the request as required by the Federal Rules of Civil Procedure. The court noted neither the third request nor the two prior stay motions offered any justification for pausing the case, and ordered Montana to answer or otherwise respond to the complaint within 21 days, with no further extensions permitted.

Applying the four-factor test from Winter v. Natural Resources Defense Council, Inc., the court denied Kalshi's preliminary injunction motion without prejudice on irreparable-harm grounds alone, declining to address the remaining factors. The court held that Kalshi's repeated agreement to stay the litigation for months at a time undermined any showing that irreparable harm was likely rather than merely possible. According to the court, that failure was fatal to the injunction request on the current record.