Montana's ceasefire with Kalshi leaves nine other platforms exposed

A five-page joint stipulation filed in a Montana federal court last week produced an unusual outcome: Kalshi dropped its lawsuit, Montana froze its enforcement, and both sides agreed to wait for the Ninth Circuit to speak again. For Kalshi, the arrangement buys time. For the eight other platforms still holding cease-and-desist orders across multiple states, it demonstrates something uncomfortable — the truce is not a template, it is a carve-out.

The mechanics of the Montana agreement are specific. Montana will not pursue enforcement, investigation, or administrative action against Kalshi until the Ninth Circuit either denies further review or issues an en banc decision. If Montana wants to move before then, it owes Kalshi thirty days' written notice. That is a real protection, and Kalshi earned it by filing the September 9 en banc petition. Underdog, Polymarket, Robinhood, Coinbase, and the others did not file that petition. They have no equivalent arrangement. Montana can move against any of them tomorrow.

Connecticut is the sharper pressure point. The state's Department of Consumer Protection ordered nine platforms to halt sports-related contracts, stop advertising them, and allow users to withdraw funds. Underdog responded by filing a 39-page federal complaint asking for a declaratory judgment that Connecticut cannot apply state gaming regulations to event contracts traded on designated contract markets. The argument is the same one Robinhood and the CFTC have advanced separately: federal preemption forecloses state enforcement. Three separate legal actors are now making the same claim in Connecticut courts. When three parties make the same argument in parallel, that is either a sign of strength or a sign that none of them has won it yet.

I have watched preemption arguments move through federal courts before. The claim tends to survive long enough to generate an injunction, then stall at the merits. Underdog got a temporary injunction in Massachusetts on Kalshi's sports contracts. That is a data point, not a verdict. The Connecticut DCP's position — that these markets allow bets from people under 21 and on in-state college teams — is not going away on a preemption ruling alone. Those are public interest arguments, and the CFTC's own enabling statute gives it authority to prohibit event contracts it finds contrary to the public interest. The states know this. They are not arguing they have concurrent jurisdiction; they are arguing the CFTC has not exercised the jurisdiction it holds, and that the silence cannot itself preempt enforcement.

The reporting says this is a story about platforms fighting back. I think it is a story about how asymmetric the legal exposure has become. Kalshi has a ceasefire in Montana, an injunction in Massachusetts, and an en banc petition pending in the Ninth Circuit. That is a coherent legal posture. Underdog is in Connecticut federal court arguing a permanent injunction. Robinhood filed its own action. Polymarket has no injunction anywhere. The nine platforms named in Connecticut's order are not a coalition — they are nine separate legal situations that happen to share a zip code in the same cease-and-desist letter.