Kalshi Utah: Tenth Circuit Denies Injunction, Ban Holds

Kalshi lost its bid to switch off Utah's gambling laws while it appeals: the US Court of Appeals for the Tenth Circuit denied its motion for an injunction pending appeal on September 8, 2026. The order is two pages long, and it means the prediction-market company must keep complying with a state ban it says federal law preempts, for however long the appeal takes.

We reported on August 7 that Utah had entered judgment against Kalshi and that a motion to freeze that ruling was pending. It has now been decided, against Kalshi. Judges Harris L Hartz and Paul J Kelly issued a per curiam order in KalshiEX LLC v. Cox, No. 26-4100, on appeal from Judge Robert J. Shelby in the District of Utah.

The reasoning is one sentence. After listing the four factors in Tenth Circuit Rule 8.1 - likelihood of success, irreparable harm, harm to the other side, and risk to the public interest - the panel wrote: "Kalshi has not shown these factors weigh in its favor. Accordingly, we deny its motion."

Why does a prediction-market ruling matter to sweepstakes players?

Because it is the same argument, and the appeals courts are now split on it. Kalshi holds a federal licence from the Commodity Futures Trading Commission and says that licence makes state gambling law irrelevant to it. Several operators leaving the dual-currency model are watching whether a federal wrapper lets them keep serving states that shut the door. Our guide to whether sweepstakes casinos are legal sets out how narrow that door has become.

Where do the appeals courts stand on Kalshi and state gambling law?

Four appellate courts have now touched some version of it, and they do not agree.

That first row is the one to keep hold of, because it cuts against the run of the others. A divided Third Circuit panel held the Commodity Exchange Act likely does preempt state gambling law for these contracts, and New Jersey remains blocked from enforcing against Kalshi as a result. The Fourth Circuit appeal, KalshiEX LLC v. Martin, No. 25-1892, has not been decided. So this is a live circuit split, not a one-way run of losses.

Only two of the four rows are merits rulings. The Second Circuit order in the Connecticut appeal was interim and procedural, and this one is a refusal of emergency relief, which is a lower bar to lose on than a judgment. We wrote up the Ninth Circuit's published opinion at the end of August because a published opinion binds district courts across nine states.

What did Utah argue, and what did Kalshi say back?

Utah's opposition, filed August 21 by Attorney General Derek Brown and the Solicitor General's office, opens by quoting Kalshi's own marketing: the company "has widely advertised its app as enabling users to 'bet on anything.'" It argues the exclusive-jurisdiction provision Kalshi relies on merely "separate[s]" regulatory functions, and that "following the rise of prediction markets as backdoor gambling apps, most courts have similarly concluded that the CEA does not preclude States from enforcing their gambling laws against prediction-market companies."

Kalshi's August 11 motion put the harm in concrete terms, and this is the part worth reading if you hold a position on any of these platforms. Without an injunction, it said, "shutting down access in Utah and unwinding users' positions" would impair user access and risk harm to its federal licence. It also described a "Hobson's choice": Utah makes intentionally offering online gambling a third-degree felony under Utah Code section 76-9-1404, so the company either breaks state law or, on its account, breaks its federal obligations.

The last exchange happened on the morning the order came out. Utah filed a Rule 28(j) letter on September 1 pointing the court at the Ninth Circuit's Assad decision. Kalshi's response landed at 7:49am on September 8 and called that analysis "unpersuasive," arguing the panel "ignored that the CFTC's 'exclusive jurisdiction' applies to all 'agreements' traded on-DCM, not just swaps." The denial was entered at 11:10am the same morning. The order records the letter and the response, so both were in front of the judges.

What happens next in the Kalshi Utah appeal?

The merits appeal continues. Nothing in the September 8 order decides it, and the panel gave no reasons beyond the sentence quoted above, so it tells you very little about how the merits will land.

For a player, the practical read is narrower than the legal one. One federal appeals court has endorsed the theory that a CFTC licence displaces state gambling law, and one has rejected it in a published opinion, so the question is genuinely open and heading for the Supreme Court rather than settled in either direction. What is not open is the near term: Kalshi has now failed twice to get emergency relief while it argues the point, and Utah's ban applies to it today. If you are choosing where to play on the basis that a federal licence beats a state ban, the courts have not resolved that for you, and two of them have told this company to comply in the meantime. Our state-by-state availability matrix tracks where the sweepstakes brands themselves actually operate, which is a different and more useful question than where a prediction market says it is entitled to.

Sources & documents

• Order denying the motion for injunction pending appeal, September 8, 2026 (PDF), two pages, per curiam, Judges Hartz and Kelly
• Kalshi's Rule 28(j) response, filed 7:49am September 8, 2026 (PDF), for the criticism of the Ninth Circuit's Assad reasoning
• Utah's opposition to the injunction motion, August 21, 2026 (PDF), for the state's preemption argument and the "bet on anything" quotation
• Kalshi's emergency motion for an injunction pending appeal, August 11, 2026 (PDF), for the unwinding-positions and Hobson's-choice arguments
• KalshiEx v. Cox, No. 26-4100 (10th Cir.) - full docket, read September 8, 2026, for the filing sequence and the 7:49am and 11:10am entry stamps

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