A federal judge in Iowa denied Kalshi's motion for a preliminary injunction that would have stopped the state from regulating the company's sports-related event contracts under gambling law. The ruling weakens the prediction market operator's claim that federal commodities legislation pre-empts state oversight.
U.S. District Judge Stephen Locher found that Kalshi is unlikely to prove the Commodity Exchange Act directly displaces Iowa gambling statutes. He noted that the CFTC's exclusive jurisdiction covers swaps and contracts for future delivery of commodities, and that the terms "event" and "occurrence" in the statute refer to financial or commodity markets rather than sports outcomes.
Kalshi filed a pre-enforcement suit in March after meeting with representatives from Iowa Attorney General Brenna Bird's office, fearing possible state action against its business. The decision allows Iowa to continue its regulatory case against Kalshi but does not determine whether the state will pursue enforcement, whether the company will appeal, or how the court will rule on the underlying claims.
