A fight over prediction markets, federal authority, and Arizona gambling law is moving onto a slower track after all sides asked for more time, even as they continue arguing over what a temporary court order actually blocks.
In a joint status report filed Monday (April 20) in U.S. District Court in Arizona, the United States, the Commodity Futures Trading Commission, Kalshi, and Arizona officials said they had met under a prior court order and were updating the judge on scheduling.
Arizona asked to cancel the current May 6 hearing on the federal plaintiffs’ request for a preliminary injunction and reset it for June 3 or another date later in June. The state also said, “Defendants consent to extending the current Temporary Restraining Order through the hearing date and to such time as the Court decides the Motion for Preliminary Injunction.”
The temporary restraining order was issued earlier this month after a federal judge temporarily halted Arizona enforcement tied to the disputed contracts, preserving the status quo while the case moved forward.
The parties also noted that the Ninth Circuit Court of Appeals may soon rule in related consolidated appeals argued April 16. This involves similar clashes over event contracts and whether states can act against federally regulated markets.
Federal plaintiffs said they do not need another round of briefing. They told the court that “the best course of action would be to convert the TRO to a preliminary injunction and to stay the case pending a decision in the Ninth Circuit.” Kalshi said it agrees.
Arizona dispute over Kalshi scope remains amid delays
Arizona wants a fuller record before any injunction decision. State lawyers said the court would benefit from information “regarding standing and any financial, economic, commercial consequences associated with sports or election event contracts traded on designated contract markets.”
The state added that it expects witness testimony at the hearing and declarations with its opposition filing. Arizona also said supplemental briefing would help after the restraining order and recent appellate arguments. It plans to address “standing, merits (what instruments do or do not qualify as swaps, or as properly listed event contracts, and why), irreparable harm, and the balance of equities.”
Federal plaintiffs pushed back, saying the judge already has substantial briefing and heard argument on April 10. They said more briefing “would be duplicative, especially with the Ninth Circuit likely to issue a decision quickly.” Kalshi likewise said more briefing is unnecessary, though it wants to participate if future filings affect its interests.
The filing also touched on an intervention request from North American Derivatives Exchange, doing business as Crypto.com Derivatives North America. Arizona said it does not oppose intervention if the company joins the federal plaintiffs’ injunction request and avoids repetitive briefing. If approved, CDNA would be added as an intervenor-plaintiff, permitted to file its complaint in the consolidated action, and formally join the plaintiffs’ request for a preliminary injunction and temporary restraining order. Arizona said it does not oppose the move after receiving assurances that CDNA would avoid duplicative briefing.
Another major issue centers on the restraining order’s reach. Arizona said it reads the order as blocking new enforcement actions, but not investigations or subpoenas. Federal plaintiffs objected, arguing investigations burden federally regulated designated contract markets, unsettle traders, and interfere with the CFTC’s claimed exclusive oversight role. Kalshi said it agrees with that reading.
The Arizona case follows other recent rulings, including appellate decisions that favored Kalshi in disputes involving New Jersey and Arizona.
Featured image: Kalshi / Canva
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