Prediction Markets in Montana

Quick Verdict: Kalshi Took Montana to Federal Court

Montana is one of the most active prediction market litigation fronts in 2026. After the Montana Department of Justice issued a second cease-and-desist letter to Kalshi in early April 2026 — following an earlier March 2025 cease-and-desist — Kalshi responded by filing a federal lawsuit against Montana Attorney General Austin Knudsen on April 15, 2026. The suit seeks to enjoin Montana from enforcing state gambling laws against the platform on federal preemption grounds.

As of April 21, 2026, no court has ordered Kalshi or other CFTC-regulated DCMs to geofence Montana residents. The platforms remain accessible to MT residents 18+ statewide. Montana's situation is structurally similar to Arizona's earlier in the year — and Arizona produced a federal court order pausing state enforcement. Industry observers are watching closely whether Montana will follow the same pattern.

The April 2026 Kalshi v. Montana Lawsuit

Kalshi filed its federal complaint in the US District Court for the District of Montana on April 15, 2026, naming Montana Attorney General Austin Knudsen as the primary defendant. The complaint alleges that Montana reneged on a prior agreement reached after the March 2025 cease-and-desist letter, in which Kalshi understood the AG would not pursue further enforcement while federal preemption questions worked through the courts.

The April 2026 second cease-and-desist letter — and the AG's communicated intent to bring criminal charges against the company — broke that informal posture and triggered Kalshi's federal filing. Kalshi's complaint seeks (1) a declaratory judgment that the Commodity Exchange Act↗ preempts Montana state gambling law as applied to CFTC-registered DCMs, (2) a preliminary and permanent injunction barring Montana from enforcing state gambling laws against Kalshi, and (3) attorney fees and costs.

The AG's office, in public statements through Montana media including the Helena Independent Record and KTVQ Billings, has maintained that Kalshi violates Montana state gambling laws and that federal jurisdiction does not preempt the state's traditional police power over gambling within Montana.

Montana's Unusual Sports Betting Framework

Montana operates one of the most restrictive legal sports betting markets in the United States. Sports Bet Montana is a state lottery monopoly product launched in March 2020 — the only legal sports betting option in the state. The product is operated by Intralot under contract with the Montana Lottery and is restricted to:

1. In-person wagering at Sports Bet Montana retail kiosks located at licensed Montana lottery retailers (taverns, restaurants, casinos)
2. On-property mobile wagering only when physically located on a participating retailer's premises (geofenced by retailer location)

There is no off-premises mobile sports betting in Montana under the Sports Bet Montana framework. Major operators like FanDuel, DraftKings, BetMGM, Caesars, ESPN BET, and Fanatics do not operate sportsbooks in Montana — the lottery monopoly excludes them.

This restrictive framework is part of why federally regulated prediction markets have meaningful consumer demand in Montana: residents who want sports event contract exposure outside their nearest tavern have effectively no other legal option. Kalshi's argument in court will frame this consumer-demand vacuum and the federal CFTC framework as legitimate alternatives.

What Montana Residents Can Trade in 2026

Full federal prediction market catalog is available to MT residents 18+ as of April 21, 2026:

• NFL, NBA, MLB, NHL — full league coverage
• College sports — Montana Grizzlies and Montana State Bobcats football and basketball, plus full national college coverage on Kalshi
• Politics — 2026 midterms (Montana's 2026 US Senate race is one of the most-watched in the country given the state's competitive recent history), 2028 presidential, congressional control
• Economic data, crypto, culture, weather — full catalog (Montana wildfire-related contracts have been particularly active given the state's wildfire exposure)

Best Platforms for Montana Residents

OG.com is our top pick for Montana in 2026. Crypto.com's CFTC-regulated sports-first prediction market combines a 4-leg parlay builder, social trading feed, and live in-game contracts — and new traders can earn up to $100 in bonuses with code RANKPREDICTS. Kalshi remains a strong runner-up for the deepest non-sports catalog and lowest published fees.

Polymarket US is not named in the Montana enforcement action and offers strong politics/crypto liquidity at the lowest fees in the category.

Robinhood provides Kalshi-routed contracts in the familiar Robinhood app for existing MT brokerage users.

DraftKings Predictions and FanDuel Predicts are particularly relevant in Montana because the state's Sports Bet Montana lottery monopoly excludes both companies' sportsbook brands. The Predictions products give MT residents the closest equivalent to a familiar sportsbook-style mobile experience for event contracts.

How MT Compares to Neighboring States

Montana's regional context is mostly favorable. North Dakota has no legal sports betting and no DCM enforcement. South Dakota has retail-only sports betting (geofenced to Deadwood) and no DCM enforcement. Idaho has no legal sports betting and no DCM enforcement. Wyoming has full mobile sports betting and no DCM enforcement.

For MT residents who travel, Wyoming offers full mobile sports betting alternatives and equally accessible prediction markets. The cross-border situation favors MT residents who can drive south.

Risk Considerations for Montana Traders

Until the federal preemption case is resolved, MT traders should monitor the docket. A federal court order paralleling the Arizona outcome (April 11, 2026 federal injunction against state enforcement) would solidify access. A state-favorable ruling could trigger geofencing similar to Nevada's situation.

VPN use to bypass any future restrictions violates platform terms of service and can result in account closure and forfeiture.

Tax Considerations for Montana Residents

Montana has a graduated state income tax with a top rate of 5.9% (under the recently enacted MT tax reform). Net gains from prediction market trading are taxable at federal level plus the MT state rate. Platforms issue 1099 forms when reporting thresholds are met.

Montana residents should also note that Sports Bet Montana lottery winnings are separately reported by the lottery, distinct from prediction market 1099 reporting. Track each separately.

Outlook: Federal Preemption Test Case #2

The Kalshi v. Montana case is the second high-profile state where Kalshi has gone offensive (suing the state) rather than defensive (responding to state suits). The first was Arizona, where Kalshi obtained a federal court order on April 11, 2026 pausing state enforcement. If Montana follows the same federal precedent, MT traders should retain full access throughout 2026 even as the litigation continues.

The case sits in the Ninth Circuit, the same circuit where the Nevada case is pending appeal. The Ninth Circuit's eventual posture will significantly shape Montana's outcome — and vice versa. Industry observers expect both cases to consolidate or coordinate in some form before final appellate decisions.