KalshiEX LLC v. Knudsen

Overview

After Montana’s Gambling Control Division issued cease-and-desist orders concluding Kalshi’s contracts are illegal gambling under state law, Kalshi sued Attorney General Austin Knudsen and gaming officials (April 2026) for a preliminary injunction on preemption grounds, asserting the state broke a 2025 non-enforcement understanding tied to the Nevada matter. The parties then stayed the case by agreement for months.

On August 27, 2026 Judge Donald W. Molloy refused to extend that stay, lifted it, and denied the injunction without prejudice, reasoning that Kalshi’s repeated agreement to pause the case for months at a time undercut any claim of irreparable harm. Three weeks later the parties settled it. Under a joint stipulation filed September 17 and entered as an order of dismissal on September 21, the case is dismissed with prejudice as to the five Gaming Commission members and without prejudice as to the Attorney General and the Gambling Control Division. In exchange, no defendant will bring or refer any enforcement action over Kalshi’s exchange-traded event contracts until the Ninth Circuit denies Kalshi’s petition for further review in Assad or decides the case en banc — and after that, only on thirty days’ written notice.

Changes

Logged September 22, 2026

• RulingSeptember 21, 2026

  Kalshi’s Montana case is over: dismissed on a joint stipulation in exchange for Montana’s promise not to enforce until the Ninth Circuit resolves Kalshi’s en banc petition in Assad, then only on thirty days’ notice. We had also missed Judge Molloy’s August 27 denial of the injunction.

  Joint stipulation of dismissal (Doc. 35)

Timeline

What's next: Closed. Montana may not enforce until the Ninth Circuit rules on Kalshi’s rehearing petition in Assad, and then only on thirty days’ notice. The dismissal is without prejudice as to the Attorney General and the Gambling Control Division, so the dispute can return.

Parties