Tenth Circuit Denies Kalshi Emergency Relief Leaving Utah Free to Enforce Gambling Laws on Sports Contracts
The Tenth Circuit denied Kalshi’s emergency injunction request against Utah, enabling the state to enforce gambling laws on sports event contracts during the appeal. The court ruled Kalshi met none of the four required factors for relief after losing at the district level in August. This creates immediate enforcement exposure for the CFTC-regulated operator.
SCCG Take — The decision reinforces state authority over sports-linked prediction products despite federal registration. Operators must prepare for fragmented compliance until the Supreme Court resolves the CEA preemption conflict.
The Tenth Circuit rejected Kalshi’s motion for an emergency injunction that would have blocked Utah from enforcing its gambling laws against the company’s sports-related event contracts during the pending appeal.
The court held that Kalshi failed to satisfy the four factors required for such relief: likelihood of success on appeal, threat of irreparable harm absent the injunction, absence of harm to the opposing parties, and any risk of harm to the public interest. It stated: “When seeking an injunction pending appeal, a movant must show: (a) ‘the likelihood of success on appeal’; (b) ‘the threat of irreparable harm if the … injunction is not granted’; (c) ‘the absence of harm to opposing parties if the … injunction is granted’; and (d) ‘any risk of harm to the public interest.’ Kalshi has not shown these factors weigh in its favor. Accordingly, we deny its motion.”
U.S. District Judge Robert Shelby ruled in August that the Commodity Exchange Act does not prevent Utah from treating Kalshi’s sports contracts as gambling products subject to state oversight. The Tenth Circuit decision does not resolve the underlying dispute over federal preemption.
According to World Casino News, Utah may now pursue civil or criminal measures. State law classifies the intentional provision of online gambling services to residents as a third-degree felony. Kalshi filed its federal suit in early 2026 asserting that its CFTC-regulated designated contract market status places the products under the Commodity Exchange Act and outside state gambling rules.
Utah’s Enforcement Position
Utah officials maintain that contracts tied to sporting outcomes function as betting rather than legitimate event contracts or swaps. With the emergency protection denied, the state holds the ability to act before the appeals court issues a final decision on the merits.
Path to Supreme Court Review
The Tenth Circuit outcome adds to conflicting rulings across circuits. The Ninth Circuit found Kalshi’s sports products were likely gambling contracts, while the Third Circuit saw a reasonable likelihood they qualify as swaps. Legal analyst Daniel Wallach stated states have won 12 consecutive federal rulings and prevailed in 35 of 41 procedural decisions. New Jersey has petitioned the Supreme Court to review the Third Circuit decision and clarify whether the Commodity Exchange Act displaces state sports wagering authority. The Supreme Court has not yet granted review.
Reporting: World Casino News
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
Federal registration doesn't shield you from state enforcement — circuit splits mean fragmented compliance until SCOTUS weighs in.
This is the compliance headache every operator dreads: you're CFTC-regulated, but a state calls it gambling and can prosecute. Circuit splits are deepening, and no one knows where the line is until the Supreme Court steps in. SCCG tracks every jurisdictional fault line because your exposure changes state by state.
- Kalshi lost emergency injunction; Utah can now enforce gambling laws during appeal
- Judge ruled CFTC oversight doesn't preempt state authority over sports-linked contracts
- Circuit split widens — Ninth, Tenth, and Third Circuits contradicting each other on CEA scope
SCCG angle: SCCG has regulatory counsel and compliance architects in every circuit. When federal and state lines blur like this, we map your exposure state by state and connect you to local advisors who know where enforcement is headed. We've guided CFTC-adjacent operators through similar minefields before — call us before you're the test case.
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