Is Kalshi legal in Iowa?

Iowa did not sue Kalshi; Kalshi sued Iowa. On March 11, 2026 it filed a complaint in federal court in Iowa, KalshiEX v. Bird, No. 4:26-cv-00109, against Attorney General Brenna Bird, the Iowa Racing and Gaming Commission and five commission officials (ECF 1, p.1). The order's caption names a slightly different set of commission members than the complaint, so this page does not list them by name.

The complaint gives Kalshi's account of why. It says a Kalshi representative met the attorney general on March 4, 2026, expecting to introduce the company and discuss "a bill pending in the Iowa legislature regarding the taxation of DCMs like Kalshi," and instead faced questions from her staff suggesting they viewed Kalshi as offering illegal sports gambling (pp.20-21, ¶61). It says that when Kalshi asked on March 10 for assurances, her office replied in writing that "we will not give any assurances about potential future enforcement" (p.21, ¶62).

Kalshi asked for a declaration that Iowa Code chapters 99, 99A, 99B, 99D, 99E, 99F, 99G and 725 violate the Supremacy Clause as applied to it, and an injunction barring the defendants from enforcing them against it (p.24). Its argument is that its contracts trade on a CFTC-designated contract market and that federal law gives the CFTC exclusive jurisdiction over them (p.2, ¶1).

On September 8, 2026, Judge Stephen H. Locher denied Kalshi's motion for a preliminary injunction. He concluded that "Kalshi is unlikely to succeed on the merits of its argument that the Commodity Exchange Act preempts Iowa gambling laws and regulations" (ECF 57, p.1).

He first held that Kalshi had standing to sue the attorney general, because a reasonable person could view Kalshi's business as conduct Iowa's criminal gambling statute, Iowa Code § 725.7(1), prohibits, and she had not disavowed enforcement (pp.7-8). He said Kalshi had arguably failed to show standing against the commission, which it had apparently never dealt with, but decided the motion on the merits for all defendants (p.9).

On the likelihood of success, the factor that decided the motion, he concluded that sports-related event contracts are not "swaps" under the Commodity Exchange Act, so the CFTC does not have exclusive jurisdiction over them (p.18). That is a finding on how the case is likely to come out, made on a preliminary-injunction motion (pp.1, 22), not a final ruling on the question. He found field preemption unlikely too, pointing to the Act's savings clause for state authorities (pp.19-20), and conflict preemption, writing that Kalshi "simply must follow the laws and regulations of each state in which it makes those contracts available" (p.21). He added that the other injunction factors would not change the result, noting Kalshi gave "virtually no concrete information" about the harm it faced (p.22).

The order's analysis is about Kalshi's sports-related contracts; it does not separately address Kalshi's other categories. It refuses Kalshi's request and orders nothing against Kalshi, and it is a ruling at the preliminary stage, not a final judgment. We could not read the district docket in this check, so we could not determine whether the rest of the case is moving or paused during the appeal.

No order or filing we read addresses withdrawals, deposits or open positions for Iowa customers. The September 8 order denies Kalshi's request and directs nothing at Kalshi or its users.

What the record does contain is Kalshi's own account of what an enforcement action might do. The order records Kalshi's statement that, if the attorney general or the commission brought one, Kalshi "will feel compelled to close all open positions held by Iowa residents" (p.4), and Kalshi's estimate of "nearly 42,000 verified users in Iowa" (p.6). Those are Kalshi's descriptions, not findings or orders, and the judge wrote that Kalshi had not quantified the risk (p.22). We could not determine whether any enforcement action has been brought since September 8.

In court, the attorney general and the commission argued that Kalshi lacked standing and was unlikely to win (ECF 57, p.6). They said several of the Iowa Code chapters Kalshi named do not apply to its business, that the attorney general's power here is largely limited to criminal cases under Chapter 725, that the commission enforces only Chapters 99D, 99E and 99F, and that no enforcement was imminent (p.7). The American Gaming Association and a group of tribes and tribal gaming organizations filed briefs opposing Kalshi (pp.6-7).

The order records that the attorney general had no active investigation of Kalshi and had promised not to open one before the injunction ruling (p.8). It also notes that she has signed amicus briefs in other states' Kalshi cases arguing that Kalshi's offerings are illegal under state law (p.4). None of the documents we read records an Iowa lawsuit, cease-and-desist or other enforcement step against Kalshi, and we could not determine whether there has been one since September 8.

Kalshi's position is that it runs an exchange, not a sportsbook: in its words, "Traders do not bet against the house, but rather enter into contracts with other traders on an exchange," and it charges a fee for each trade (p.3, quoting Kalshi's declaration). It has self-certified its sports contracts with the CFTC, which the order says has taken no further action on them (p.3) and has never affirmatively approved them (p.19).

Kalshi filed a notice of appeal on September 15, 2026 (district docket, ECF 59). The Eighth Circuit docketed it as No. 26-2874 and issued a briefing schedule on September 17, 2026. Kalshi's opening brief and appendix are due November 6, 2026; Iowa's brief is due 30 days from the date the court issues its notice of docket activity filing Kalshi's brief, and Kalshi's reply 21 days from the notice filing Iowa's; neither has a calendar date yet (p.2). The appeals docket copy we read on October 22, 2026 shows no motion for a stay or for an injunction while the appeal is pending, and no argument date; that copy can lag the court's own system.

The Iowa order relies on other courts' Kalshi rulings. It cites the Ninth Circuit's August 28, 2026 decision in KalshiEX v. Assad (No. 25-7516), which affirmed in part and remanded the Nevada ruling against Kalshi (p.13), and quotes it (p.15). It also notes Kalshi appeals then pending in the Second Circuit (pp.15, 19) and the Fourth Circuit (p.10). We could not determine from the documents we read whether the Eighth Circuit has acted since September 17. Kalshi at the Supreme Court follows the national question, and is Kalshi gambling? sets out both sides.

Not that we found. Senate File 2470 would require a designated contract market doing business in Iowa to hold a state permit, with a $20 million initial fee and a $100,000 annual renewal (pp.2-3, § 99H.4), and would tax its adjusted revenues from those contracts at 20% (p.3, § 99H.5). Adjusted revenues are the fees collected from traders less payouts, multiplied by the share of fees paid by traders in Iowa (p.1, § 99H.1). A second part would impose a 20% excise on the amount paid to buy a contract (p.7, § 453F.3). It would take effect six months after the attorney general notifies the legislature and the Code editor that the 20% revenue tax has been declared unconstitutional or is otherwise unenforceable and all appeals have been exhausted (p.8, sec. 19). The bill also contained state income-tax provisions; none of it became law that we found.

The Senate passed it 45-1 on March 31, 2026. The legislature's bill history shows a House Ways and Means subcommittee recommending passage on April 27, 2026, and no House vote. The permit fee and the 20% tax would fall on the exchange, not on traders.

The Iowa filings we read name only Kalshi and Iowa officials and mention no broker. We could not determine whether Iowa has taken any action against brokers that offer Kalshi's contracts, such as Robinhood or Coinbase.

Nothing in the case addresses federal tax, and a state gambling case isn't a ruling on federal income tax. Gains and losses on past trades are reported on a federal return; how Realize rebuilds them from Kalshi's data is in how to file Kalshi taxes. Every other state's status is on the Kalshi legal page.