Overview
- U.S. District Judge Michael Liburdi denied Kalshi’s request for a preliminary injunction on Wednesday, leaving Arizona’s 20-count criminal case on track for an April 13 arraignment.
- In a separate filing Wednesday, the CFTC and DOJ asked the same court to block Arizona’s enforcement, arguing Kalshi’s yes-or-no event contracts are financial derivatives regulated under the Commodity Exchange Act.
- The judge’s denial turned on the Anti-Injunction Act, which generally bars federal courts from stopping ongoing state criminal cases except in narrow, not-yet-met circumstances.
- Courts are divided, as a Third Circuit panel on April 6 sided with Kalshi in New Jersey, while other judges, including in Nevada, have allowed state crackdowns to continue, and federal suits now target Arizona, Connecticut, and Illinois.
- The stakes reach beyond one case, since a ruling for federal preemption could create one national rulebook for prediction markets, while losses could lock in a state-by-state patchwork and spur more bans like the Minnesota bill now moving through committees.