Montana and Kalshi Reach Joint Stipulation — State Pauses Enforcement Pending Ninth Circuit En Banc
Kalshi dismissed its lawsuit against the Montana Department of Justice on September 17 after both sides filed a joint stipulation in which Montana agreed to pause all enforcement, investigations, and cease-and-desist proceedings against Kalshi's event contracts. The pause lasts until the Ninth Circuit either denies en banc review of the August 28 ruling or issues an en banc decision. Montana must give Kalshi 30 days written notice before resuming any enforcement action after that window closes. The agreement mirrors the Robinhood-Michigan stipulation from September 4 and reinforces a pattern of states reaching negotiated compliance pauses while the appellate process plays out.
Kalshi and the Montana Department of Justice filed a joint stipulation on September 17, 2026 under which Kalshi agreed to dismiss its lawsuit against Montana and Montana agreed to pause all enforcement actions, investigations, and cease-and-desist proceedings related to Kalshi's event contracts. The pause is explicitly tied to the Ninth Circuit's en banc process: it runs until the Ninth Circuit either denies Kalshi's en banc petition or issues an en banc decision — which could take weeks to months depending on whether en banc review is granted and, if so, how long the full panel takes to rule. If the en banc process concludes and Kalshi does not have an order from the Ninth Circuit protecting its operations, Montana must give 30 days written notice before resuming enforcement, giving Kalshi a window to seek emergency relief or alternative protection. The agreement precludes Montana's Gambling Control Division from enforcing the cease-and-desist letters it had previously issued to Kalshi.
Montana's case followed a familiar escalation pattern: the Montana Department of Justice's Gambling Control Division issued cease-and-desist letters to Kalshi in April 2026 alleging sports event contracts were unlicensed gambling under Montana law; Kalshi counter-sued in federal court. The September 17 stipulation represents a bilateral pause rather than a resolution: neither party has conceded the underlying legal question, and Montana preserves its ability to resume enforcement once the en banc window closes with appropriate notice. The structure closely mirrors the Robinhood-Michigan stipulation of September 4, in which Robinhood agreed to exit Michigan sports contracts voluntarily while Michigan agreed not to enforce, with the Sixth Circuit appeals remaining live. Together, the two stipulations — Montana/Kalshi and Michigan/Robinhood — suggest that platforms and states are finding it practical to reach interim accommodations that reduce enforcement friction while the appellate resolution works through the system.
Montana is within the Ninth Circuit's jurisdiction, which makes the en banc linkage directly relevant. The August 28 Ninth Circuit panel ruling — that Nevada can regulate Kalshi's sports contracts as gambling — is precedent that Montana can cite in any future enforcement action against Kalshi. If the Ninth Circuit denies en banc review, the panel ruling stands and Montana's enforcement position is strengthened by appellate authority; Montana then gives 30 days notice and resumes. If the Ninth Circuit grants en banc review and the full panel reverses the panel ruling — unlikely but possible — Montana's enforcement authority would be undermined, and the pause would extend for the duration of the full en banc process. Either way, tying the stipulation to the en banc outcome is a more efficient path for both sides than litigating Montana's enforcement case in parallel with the Ninth Circuit proceedings that will determine the applicable precedent.
The Montana resolution and the Missouri escalation, occurring on consecutive days (September 17 and 18), illustrate the range of state AG strategies currently in play. Montana opted for a negotiated pause, reducing enforcement costs and litigation risk while the Ninth Circuit process resolves the applicable legal framework for Ninth Circuit states. Missouri issued the broadest simultaneous multi-platform C&D action in the sector's history, maximising enforcement pressure across all operators simultaneously during NFL season. Neither approach is inherently wrong: Montana's calculation favours efficiency (let the appellate process resolve the law before expending resources on enforcement); Missouri's calculation favours leverage (create maximum compliance pressure while platforms are commercially most exposed during the NFL season). The divergence reflects that state AG prediction market enforcement is not centrally coordinated, and each state is responding to its own political, commercial, and legal context.
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