By SectorWire desk ·
Judge Stephen Locher rejected Kalshi’s preliminary injunction request in Iowa on Tuesday. Kalshi sought to prevent state enforcement of gambling laws against its sports event contracts.
Kalshi failed to secure preliminary protection against Iowa gambling enforcement targeting its sports event contracts.
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Kalshi’s injunction rejection rests on the judge finding express federal pre-emption of Iowa law unlikely for sports event contracts.
The dispute concerns whether states can apply gambling rules to sports-event contracts offered by federally regulated exchanges.
The findings bear on state challenges to Kalshi and Polymarket's position that their contracts fall exclusively under CFTC jurisdiction.
The analysis questions Kalshi’s explanation for concentrated activity in its ether perpetual contracts.
The new contracts allow partial settlement rather than requiring players to reach the full statistical target.
The dispute could affect whether prediction market operators face state gambling laws alongside federal oversight.