Kalshi has withdrawn its request for a new injunction in Maryland after reaching an agreement with state officials that temporarily halts enforcement of state gambling laws against the company.
The arrangement ensures that Maryland will not take action until the US Court of Appeals for the Fourth Circuit rules on Kalshi’s ongoing appeal.
The filing, submitted on 12 August, states that Maryland’s assurance of non-enforcement eliminates the immediate need for court intervention.
The agreement will remain in place until the appellate decision is issued, which is not expected for at least two months after briefing concludes. Under the current schedule, Kalshi’s opening brief is due 15 September, with Maryland’s response due 15 October.
At the heart of the dispute is whether Kalshi’s sports event contracts fall under federal commodities regulation or state sports betting laws.
Kalshi maintains it operates as a federally regulated “designated contract market” under the oversight of the Commodity Futures Trading Commission, while Maryland contends the contracts are effectively sports wagers subject to its Lottery and Gaming oversight.
The state previously described the company’s offerings as “indistinguishable” from traditional sports bets.
Kalshi and Maryland to continue legal fight
The legal battle intensified after Kalshi lost in the US District Court for the District of Maryland.
Judge Adam B. Abelson denied the company’s initial injunction request, ruling that although the federal Commodity Exchange Act supersedes state laws on commodity regulation, it does not override state authority on gambling.
He noted Kalshi could pursue a Maryland sports betting licence if it wished to continue offering sports event contracts in the state.
That decision marked Kalshi’s first significant legal setback after favourable rulings in New Jersey and Nevada.
Following the loss, the company appealed to the Fourth Circuit, arguing that Maryland’s laws should not apply to federally regulated contracts.
It sought a new injunction to maintain operations during the appeal, citing potential financial harm if forced to comply with state betting regulations before the dispute is resolved.
Without the recent agreement, Maryland could have enforced a cease-and-desist order, disrupting Kalshi’s business and potentially exacerbating losses if the appellate court later ruled in the company’s favour.
By securing the temporary non-enforcement pledge, Kalshi has avoided an immediate legal conundrum while preserving its position in the broader regulatory debate over prediction markets and sports wagering authority.