Montana and Kalshi Reach Joint Stipulation — State Pauses Enforcement Pending Ninth Circuit En Banc
Kalshi dismissed its lawsuit against Montana on September 17 after both parties filed a joint stipulation in which Montana agreed to pause all enforcement pending the outcome of Kalshi's en banc petition at the Ninth Circuit. Montana must give 30 days notice before resuming once the en banc window closes. The agreement mirrors the Robinhood-Michigan stipulation of September 4 and reflects a pattern of negotiated appellate-linked pauses.
Kalshi and Montana's Department of Justice filed a joint stipulation on September 17, 2026 — Kalshi dismissed its federal lawsuit against the state, and Montana agreed to pause all enforcement, investigations, and cease-and-desist proceedings against Kalshi's event contracts. The pause is explicitly linked to Kalshi's Ninth Circuit en banc petition: it runs until the circuit either denies en banc review or issues a full-court decision. Montana must give Kalshi 30 days written notice before resuming enforcement once that window closes. Neither party has conceded the underlying legal question of whether Montana can regulate prediction market sports contracts as gambling.
For UK readers, the Montana settlement mirrors a Gambling Commission licence review hold — where enforcement is suspended while a broader regulatory question is resolved elsewhere, and the licence holder agrees to specific conduct commitments during the pause. The structure is efficient for both sides: Montana avoids the cost of parallel litigation while the Ninth Circuit en banc process resolves the applicable legal framework for states in its jurisdiction (which includes Montana). Kalshi avoids a concurrent enforcement battle in a small market during a period when it is already managing active enforcement in Michigan, Nevada, Washington, and Connecticut, and facing Missouri's new C&D letters.
The stipulation's explicit linkage to the en banc process is its most legally interesting feature. Montana is in the Ninth Circuit's jurisdiction, so the August 28 panel ruling that Nevada can regulate Kalshi's sports contracts as gambling is directly applicable precedent. If the Ninth Circuit denies Kalshi's en banc petition — the statistically more likely outcome — the panel ruling stands and Montana's enforcement position is immediately strengthened. Montana then gives 30 days notice and resumes enforcement with appellate backing. If en banc is granted and the full court reverses, Montana's enforcement authority is undermined and the pause extends for the duration of the en banc proceedings. Montana has effectively bet on the Ninth Circuit process producing a clear result before it needs to act again.
The contrast with Missouri's September 18 action — simultaneous C&D letters to six platforms — is sharp. Montana and Missouri are both outside the Third Circuit's pro-Kalshi ruling, both states where prediction market sports contracts are contested, and both states whose AG offices have received complaints from licensed gambling operators. Yet Montana negotiated a pause while Missouri escalated to a six-platform sweep the following day. The divergence suggests that state enforcement timing in the prediction market sector is driven more by each AG's individual posture, their state's licensed gambling industry relationships, and the local political calendar than by any coordinated multi-state enforcement strategy.
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