Montana Gambling Control Division Orders Kalshi to Cease Illegal Gambling

• The Montana Gambling Control Division has issued Kalshi a cease-and-desist order for its sports event contracts
• A Montana Gambling Control Division spokesperson told Sports Betting Dime an order will also be sent out to Robinhood
• The division defines the sports event contracts as illegal gambling

We now have more details on Montana’s cease-and-desist notice to Kalshi.

The Gambling Control Division of the Montana Department of Justice formally sent Kalshi a cease-and-desist notice to stop offering its sports event contracts to residents of Big Sky Country. The division sent Kalshi its cease-and-desist notice on March 26, one day before the New Jersey Division of Gaming Enforcement sent its notices to Kalshi, Robinhood, and Crypto.com.

A spokesperson for the Montana Gambling Control Division told Sports Betting Dime the division is also crafting a cease-and-desist notice to Robinhood for its sports event contract markets.

Classifying Sports Event Markets as Illegal Gambling

According to the Gambling Control Division of the Montana Department of Justice, Kalshi’s sports event contract markets constitute “illegal gambling within the meaning of Montana law and accordingly calls upon Kalshi to cease and desist its illegal activities within the state of Montana.

“The aforementioned GCD investigation has determined that Kalshi’s ‘event contracts’ are gambling within the meaning of MCA § 23-5-112(14)(a) because participants risk money or other things of value for a gain that is contingent in whole or in part upon lot, chance, or the operation of a gambling enterprise. Kalshi does not have a Montana gambling license, and yet allows people located within Montana to place bets in its ‘event contract’ program,” Jeremy S. Craft, chief legal counsel of the Montana Department of Justice Gambling Control Division, wrote in the order.

Selling “event contracts” contingent on the outcome of a sporting event is defined as “sports wagering” through Montana law, Craft wrote. The Gambling Control Division has probable cause to conclude that Kalshi’s offering of “event contracts” constitutes illegal gambling and illegal sports betting.

Craft concludes the order with his hope that Kalshi voluntarily complies with the notice, but refusal will result in the Gambling Control Division taking legal action against the company.

Montana Actually First to Send out Cease and Desist Notices

Montana’s notice to Kalshi went out on March 26, a day before New Jersey’s much publicized cease-and-desist notices were sent to Kalshi and Robinhood. Montana regulators were the first to send notice to Kalshi to cease its sports event contracts in the country.

The first mention of a cease-and-desist notice from Montana was from Kalshi Founder Tarek Mansour in an interview with TechCruch. Mansour noted that the company would continue to offer its sports event contracts and would only halt if directed by the Commodity Futures Trading Commission.

The Maryland Lottery and Gaming Control Agency also mentioned the Montana cease-and-desist letter in today’s press release publicizing the state’s own cease-and-desist notices to the sports event contract companies.

Six states have sent cease-and-desist notices for sports event contracts so far. Maryland, New Jersey, Nevada, Ohio, Illinois, and Montana have all ordered the markets to cease in their borders.

KalshiEX filed lawsuits against both the New Jersey Division of Gaming Enforcement (NJ DGE) and Nevada Gaming Control Board (NGCB). It remains to be seen if they will file lawsuits against any other state gaming boards.