10th Circuit Rejects Kalshi’s Emergency Bid in Utah, Clearing State Enforcement of Gambling Laws

The US 10th Circuit Court of Appeals has denied Kalshi’s emergency motion for an injunction pending appeal in Utah, which removes the temporary shield the company wanted while it fights the state’s gambling restrictions. For high-risk PSPs, the point is simple: Utah can now enforce its rules while the broader federal preemption fight keeps moving.

1. The latest ruling follows US District Judge Robert Shelby’s earlier decision denying Kalshi’s request to block enforcement of Utah’s restrictions. According to the Associated Press, Shelby found that the federal law cited by Kalshi did not stop Utah from enforcing its gambling regulations.
2. Kalshi sued Utah in early 2026 after the state moved to tighten restrictions on prediction markets. The company’s core argument is that Utah lacks authority over contracts traded on an exchange registered with the Commodity Futures Trading Commission (CFTC).
3. Utah Attorney General Derek Brown said after the district court ruling that his office intended to enforce state law, while officials continued to evaluate their options. Utah’s rules prohibit proposition betting on events occurring within a game, a category that covers a significant portion of the sports-related products offered by prediction markets.
4. Kalshi asked the 10th Circuit for emergency relief while its appeal is pending, rather than asking the court to finally decide whether federal derivatives law preempts Utah’s restrictions. The court denied that temporary protection, so Utah is free to enforce its laws while the appeal continues.
5. The Utah loss is part of a broader run of setbacks for Kalshi in state-level litigation. Last week, the company also lost in Nevada, where the court said the state can apply its gambling laws to the prediction market operator.

For operators and PSPs watching this space, the practical issue is whether sports-linked prediction markets can be treated as federally regulated contract markets or are functionally sports betting under state law. If states prevail, Kalshi may have to tailor offerings to individual state gambling rules rather than running the same product nationwide.