# Montana Court Restarts Kalshi Lawsuit Kalshi's preliminary injunction request denied again. - **Source:** [ReadWrite](https://brifing.si/source/7a996b61-bc09-4e57-8483-78f2ad9dd914) - **Published:** 2026-08-28 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/57eec520-c1ef-4d4c-92b2-9763730c4007 ## Decision to Restart the Case U.S. District Judge Donald W. Molloy restarted Kalshi's lawsuit against the state of Montana. The judge rejected both parties' request to pause the case and gave Montana 21 days to respond. Molloy stated in his August 27 order that 'no extensions of time will be granted.' Kalshi's preliminary injunction request was also denied. ## Kalshi's Claims Kalshi filed a lawsuit against Montana Attorney General Austin Knudsen and other state officials on April 12. The company argues that Montana 'intruded into the federal government's exclusive authority to regulate derivatives trading.' Kalshi seeks declaratory relief and permanent injunctions. The company claims its contracts fall under federal derivatives law. ## Montana's Stance Montana's Gambling Control Division deemed Kalshi's activities illegal gambling under state law. A cease-and-desist letter sent on April 6 warned Kalshi of potential enforcement actions. Kalshi filed the lawsuit after receiving the letter and later sought an injunction. Montana insists on applying state rules instead of federal regulations. ## Delays in the Legal Process Kalshi requested a preliminary injunction nine days after filing the lawsuit. However, both parties jointly requested a pause in court proceedings the same day. Molloy approved the first pause on April 22. The parties then sought an additional 60 days, which was granted. A third pause request came on August 21. ## Judge's Decision Molloy rejected the third pause request due to insufficient grounds. Federal procedural rules require court orders to be 'requested with particularity.' Molloy found the parties failed to establish good cause and lifted the stay. A preliminary pretrial conference will be scheduled separately. ## Denial of Preliminary Injunction Molloy denied Kalshi's preliminary injunction request, finding the company's claim of 'urgent intervention' inconsistent. The judge noted that Kalshi's repeated requests to pause the case undermined its argument of 'irreparable harm.' The denial leaves Kalshi free to revisit the issue. ## Federal-State Conflict The Kalshi lawsuit highlights the conflict between federal and state regulatory authority. The company argues its contracts fall under federal derivatives law, while Montana insists on applying state rules. This case underscores regulatory uncertainties in the fintech sector. ## Outcome and Implications The Kalshi lawsuit emphasizes the clash between federal and state regulations in the fintech sector. The court's decision could set an important precedent for similar companies. Montana is expected to respond within 21 days, and the case could shape the future of fintech regulations. ## Sources covering this story - https://readwrite.com/montana-judge-kalshi-lawsuit-rejects-preliminary-injunction-request/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._