Kalshi denied preliminary injunction in Maryland case
This setback for the operator comes following successful preliminary injunctions in New Jersey and Nevada.
Key points:
– Kalshi has been denied a preliminary injunction against Maryland’s state regulator
– Judge John A. Martin has deemed the company to be operating unlawfully in the state
– This ruling comes following previous victories in similar cases for Kalshi in New Jersey and Nevada
Following the filing of an official cease-and-desist letter to Kalshi by the Maryland Lottery and Gaming Commission (MLGC) in April, the operator’s request for a preliminary injunction and temporary restraining order against the regulator has been denied.
The contention is, of course, centered around the offering of predictor products on sports outcomes. Indeed, the MLGC has deemed this offering to be unregulated sports betting – hence the filing of the cease-and-desist. Kalshi, evidently, disagrees with this conclusion; however, federal judge John A. Martin has now sided with the regulator, officially denying Kalshi’s request for a preliminary injunction.
Judge Martin’s decision appears to be centered on a presumption against preemption argument – with the judge acknowledging that the state’s interest in both prediction markets and regulated sports betting is one that is historically noteworthy. This argument pushes back against Kalshi’s opinion that presumption against preemption “does not apply to the field of regulating derivatives markets.”
This approach differs from the one taken by federal judges in the states of New Jersey and Nevada – who ruled in favour of Kalshi’s preliminary injunctions against the respective gaming regulators of each state after they also filed cease-and-desist orders against the operator. Overall, Kalshi was slapped with cease-and-desists from a total of seven state regulators, with the operator having entered legal battles against the ruling in the states of Maryland, New Jersey and Nevada.
Good to know: In June, Kalshi also filed opposition to tribal legal action in the state of Maryland
If history is anything to go by, it is likely that Kalshi will attempt to appeal against this latest ruling by Judge Martin. Nevertheless, the onus remains on the Commodity and Futures Trading Commission (CFTC) to provide additional clarity on the legality of sports events prediction markets in the US.
In May, the CFTC was reported to have requested permission to settle with Kalshi from the US Court of Appeals. Further, Donald Trump’s new nominee to lead the CFTC, Brian Quintenz, has also served as a member of the Kalshi board.
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