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A federal judge in Iowa denied Kalshi’s request for a preliminary injunction, leaving the company exposed to possible state gambling law enforcement while its lawsuit against Iowa officials continues.
The ruling came from the U.S. District Court for the Southern District of Iowa, Central Division. Judge Stephen H. Locher said Kalshi is unlikely to succeed on its claim that the Commodity Exchange Act preempts Iowa law.
Court says Kalshi is unlikely to win on preemption claim
According to the ruling, Locher found that sports-related event contracts are not “swaps” under the Commodity Exchange Act and said the Commodity Futures Trading Commission does not have exclusive jurisdiction over those contracts.
“It is simply not reasonable to conclude that Congress implicitly intended to foreclose state regulation in the entire field of sports gambling when it passed a law that had nothing to do with gambling,” Locher wrote.
The court also said Kalshi can comply with both state law and federal requirements. “This may be inconvenient for Kalshi, but it is not impossible,” Locher wrote.
Lawsuit followed March meeting with Iowa officials
Kalshi sued Iowa Attorney General Brenna Bird and the Iowa Racing and Gaming Commission after a March 4, 2026, meeting that the company said raised concerns about possible state enforcement.
According to the lawsuit, Bird said Iowa had been “looking at Kalshi for a long time,” and Kalshi’s counsel later described it as “abundantly clear that she believes Kalshi’s event contracts constitute unlawful gaming.”
Kalshi also said Iowa officials would not promise to hold off on enforcement. In the lawsuit, an official representing the attorney general’s office said “we will not give any assurances about potential future enforcement.”
The injunction denial does not end the broader case, but it means Kalshi does not have court-ordered protection from potential Iowa gambling enforcement while the legal challenge moves forward.
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Source: As reported by sportsbettingdime.com.
