In a July 31, 2026, court filing, prediction market operator Kalshi has asked a federal judge to stop state officials from applying Iowa’s gambling laws to the company’s sports event contracts. According to the operator, Iowa’s enforcement action is classified as an attempt to override federal laws, despite Congress and the Commodity Exchange Act (CEA)
In a July 31, 2026, court filing, prediction market operator Kalshi has asked a federal judge to stop state officials from applying Iowa’s gambling laws to the company’s sports event contracts.
According to the operator, Iowa’s enforcement action is classified as an attempt to override federal laws, despite Congress and the Commodity Exchange Act (CEA) giving the Commodity Futures Trading Commission (CFTC) exclusive authority over prediction market regulations. As a result, Kalshi is seeking to receive a preliminary injunction against Iowa’s Attorney General Brenna Bird and the Iowa Racing and Gaming Commission.
The request comes after state officials called Kalshi’s sports contracts criminal gambling and bookmaking, leading the company to argue that it faces an imminent threat of enforcement action and criminal liability.
The court filing states:
“Federal law grants a federal agency, the CFTC, “exclusive jurisdiction” over event contracts traded on federally regulated DCMs. Iowa’s threats to prosecute Kalshi under state gambling laws flout these federal commands by asserting concurrent state jurisdiction over event contracts traded on DCMs and usurping the CFTC’s discretion to decide which event contracts should be permitted to trade.”
Kalshi has additionally reminded that its event contracts qualify as swaps because their value is based on events that have potential financial consequences; on the other hand, Iowa officials claim that trades on federally supervised derivatives exchanges must fall under state laws.