Kalshi and Montana dismiss federal lawsuits over state gambling authority
Kalshi and the State of Montana jointly dismissed their federal lawsuit on September 21, 2026. The dispute began when Montana's Gambling Control Division sent Kalshi a cease-and-desist letter claiming the CFTC-regulated exchange violated state gambling laws. The dismissal includes non-enforcement promises from Montana with 30 days' notice and allows for the Ninth Circuit to rule on Kalshi's separate en banc appeal.
The Montana dismissal removes one front from Kalshi's widening state-by-state war, but the Ninth Circuit still holds its fate. The agreement preserves Kalshi's ability to operate there if the en banc panel grants federal preemption, yet Montana retains enforcement power if the circuit denies that appeal or sides with Nevada's anti-preemption stance.
Kalshi now faces active or threatened enforcement in Connecticut, Missouri, and California tribal lands, plus whatever follows the Ninth Circuit's next move. Traders hold positions whose legality shifts with geography and pending rulings, not regulation. Each parallel case drains legal budget that could have gone to one federal defense. The Supreme Court petition from New Jersey remains Kalshi's only shot at uniform national rules before the patchwork fragments its sports market entirely.