Despite a federal court ruling against Kalshi, Marylanders can still use the product until a federal appeals court makes its ruling.
The state will wait to enforce its cease and desist letters until after a federal appeals court weighs in on the matter. The decision comes after a judge ruled in Maryland’s favor regarding those orders.
Maryland was one of a few states that sent cease and desist letters to Kalshi, arguing they were operating an unlicensed online sports betting operation. Kalshi sued Maryland gaming regulators, arguing the company was already compliant with regulators at the federal level.
The lawsuit went Maryland’s way, but Kalshi appealed the ruling to the Fourth Circuit Court of Appeals. Maryland will wait until there is a decision by that court before taking action.
As a result, Kalshi would not seek an injunction against enforcement efforts as part of the appeal.
“That assurance of nonenforcement has rendered an injunction pending appeal unnecessary,” Kalshi’s lawyers said in court filings. “Kalshi accordingly withdraws its motion seeking that relief.”
Maryland Lawsuit Not As Smooth As Kalshi’s Other Suits
In addition to Maryland, Kalshi sued New Jersey and Nevada gaming regulators for the same actions. However, Kalshi won those suits and were allowed to continue its operations in those states.
The Maryland result is a setback for Kalshi’s defense of its sports prediction markets.
Gaming attorney Daniel Wallach noted on Twitter/X that the court appeared to give a more nuanced look at Kalshi’s sports offerings.
“Remember, Kalshi wanted to frame the preemption issue much more broadly – i.e, that the [Commodity Exchange Act] granted the CFTC exclusive jurisdiction over ‘all’ contracts traded on its exchanges,” Wallach posted. “Judge Abelson was having none of that.”
Kalshi’s opening brief in the Fourth Circuit case is due by Sept. 15. Maryland’s deadline for a response is exactly one month later. Then, the court will debate the case and issue a verdict. Thus, there won’t be a resolution to the case until closer to the end of the year.
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