Arizona Seeks Delay in Kalshi Hearing Before Ninth Circuit Ruling

Arizona filed a joint status report Monday asking a federal court to postpone the May 6 hearing on its request for a preliminary injunction against prediction market operator Kalshi to June 3 or a later date. The parties agreed to extend the existing temporary restraining order while the schedule is adjusted.

In the filing, Arizona asked for time to develop a fuller factual record and to brief issues the court will need to decide. The state said it expects to present witness testimony and to serve “limited, targeted written discovery” on topics including whether Arizona has legal standing, how event contracts should be classified, and the financial and commercial consequences of allowing such markets to operate.

The Commodity Futures Trading Commission, which intervened in the case in support of Kalshi, opposed further briefing. The CFTC told the court the record already contains extensive argument and urged the district court to issue a preliminary injunction and to stay state enforcement. Kalshi joined the CFTC in arguing additional briefing is unnecessary.

All parties acknowledged that a forthcoming decision by the U.S. Court of Appeals for the Ninth Circuit in consolidated cases from Nevada could affect the Arizona litigation. During a hearing before the Ninth Circuit on April 16, judges questioned whether sports-based event contracts differ from traditional betting and whether federal law can preempt state gambling rules. U.S. Circuit Judge Ryan Nelson characterized the industry’s distinction arguments as “sophistry to the nth degree… it’s still the house.”

Arizona told the court a Ninth Circuit ruling could bind the district court’s analysis or make further proceedings unnecessary, and said that prospect is a primary reason to delay the hearing until after the appellate decision.

The parties also asked the court to clarify the TRO’s scope. The current order prevents Arizona from enforcing state gambling laws against Kalshi’s event contracts and bars the filing of new enforcement actions. State attorneys said they understand the TRO does not prevent investigative steps, such as issuing subpoenas, and asked the court to confirm that understanding, noting investigators would refrain from filing cases based on any such investigations.

Federal regulators and Kalshi opposed that interpretation, warning that issuing subpoenas or conducting investigations while enforcement remains stayed would cause “significant harm” and could interfere with federal oversight of derivatives markets. They argued such activity would conflict with the regulatory role the CFTC has asserted.

The TRO has been extended by agreement while the parties await further action. If the court grants Arizona’s scheduling request, a preliminary-injunction hearing would occur on or after June 3; if the court declines, the May 6 date remains in place. The outcome of the Ninth Circuit’s consolidated Nevada appeals is expected to influence whether the Arizona case proceeds to a full evidentiary hearing or is affected by appellate guidance.