A federal court in Maryland has rejected Kalshi’s request for a preliminary injunction, marking the company’s first major legal defeat in its broader strategy to operate prediction markets nationwide under federal oversight.

U.S. District Court Judge Adam B. Abelson issued the ruling on Friday, August 1, declining to halt Maryland’s enforcement of state gambling laws against Kalshi.

The company, which operates a designated contract market (DCM) for event-based contracts such as sports and politics, had claimed that the Commodity Exchange Act (CEA) preempts Maryland’s regulatory authority. Abelson disagreed, ruling that Kalshi had not demonstrated a strong chance of success in proving that federal law invalidates state gambling regulations.

The decision stands in contrast to earlier court victories for Kalshi in Nevada and New Jersey, where judges granted preliminary injunctions that allowed the platform to continue operating while legal challenges were pending. Maryland, however, declined to follow suit.