Kalshi has sued another state, claiming in a new federal court filing that officials in Montana reneged on a previous agreement not to pursue enforcement action.
In a complaint filed in the U.S. District Court for the District of Montana on Sunday, counsel for Kalshi made arguments similar to those put forth in other courts around the country, including that the Commodity Exchange Act (CEA) gives the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction to regulate the event contracts they offer.
The company includes as exhibits two cease-and-desist letters sent by the state Department of Justice’s Gambling Control Division (GCD), first in March 2025 and then earlier this month on April 6, as well as correspondence between the parties.
Kalshi’s complaint, which names Montana Attorney General Austin Knudsen and several GCD representatives among the defendants, claims that the second of those C&Ds contradicted a non-enforcement agreement that Kalshi and the division reached in April 2025.
SBC Americas reached out to AG Knudsen’s office and the Department of Justice and was told only that they have not been officially served yet.
Kalshi: Montana broke promise to wait on Nevada
Kalshi’s 43-page complaint for a permanent injunction and declaratory relief states that two weeks after the company received its first C&D in Montana last April, the GCD agreed in a communication (also included as an exhibit) that “it would ‘not initiate any civil or criminal enforcement against Kalshi during the pendency of’ an ongoing litigation between Kalshi and Nevada officials”.
At that time, Kalshi had been awarded a preliminary injunction by federal Judge Andrew Gordon in Nevada.
“The GCD further agreed that Montana ‘intend[ed] to defer any enforcement pending the outcome of the proceedings before Chief Judge Gordon in Nevada and any appeal to the Ninth Circuit,’ and that ‘when those proceedings conclude, Montana authorities will provide Kalshi with reasonable notice before attempting to commence any civil or criminal enforcement action’,” adds Kalshi’s April 12 lawsuit. “On April 16, 2025, Montana authorities confirmed their ‘concur[rence]’ with this understanding in writing. That agreement remained undisturbed for nearly a year.”
Although he initially granted Kalshi an injunction, Gordon later reversed his own decision by dissolving that injunction last November.
On April 6, 2026, the Montana GCD sent a second C&D letter to Kalshi in which the GCD’s chief legal counsel interpreted that the previous agreement depended on Gordon’s injunction still being in effect. Kalshi said that “mischaracterized” the terms of the agreement.
Are you threatening me?
Noting that the second C&D also confirms that the GCD has investigated Kalshi and that the authorities stated that refusal to adhere to the enforcement order “so will result in legal action against Kalshi,” the firm stated in its filing that it faces “an immediate threat” from the state.
“Kalshi believes Montana will imminently bring an enforcement action against Kalshi with the intent to prevent Kalshi from offering event contracts for trading on its federally regulated exchange,” states Kalshi’s filing. “Montana’s stated intent to prohibit Kalshi from operating intrudes upon the federal regulatory framework that Congress established for regulating the trading of derivatives on federally designated exchanges.
“The state’s efforts to regulate Kalshi are preempted under principles of express preemption, field preemption, and conflict preemption. This Court should therefore issue both a preliminary and a permanent injunction, as well as grant declaratory relief.”
