Case: 25-7516, 01/23/2026, DktEntry: 33.1, Page 37 of 110
Trump , 926 F.3d 1180, 1198 & n.14 (9th Cir. 2019). Where the defendant
is a government entity, the last two factors merge. Drakes Bay Oyster Co.
v. Jewell , 747 F.3d 1073, 1092 (9th Cir. 2014). The Court also has permitted
injunctive relief using a sliding-scale approach, when the movant raises “se-
rious questions” on the merits and the balance of hardships “tips sharply”
in its favor. Flathead-Lolo-Bitterroot Citizen Task Force v. Montana , 98
F.4th 1180, 1190 (9th Cir. 2024) (internal quotation marks omitted). 1
This Court will reverse an order dissolving a preliminary injunction
“only where the district court abused its discretion.” Latimore v. Cnty. of
Contra Costa , 77 F.3d 489 (9th Cir. 1996) (internal quotation marks omit-
ted). The Court reviews the district court’s legal determinations de novo
and its factual findings for clear error. Adidas Am., Inc. v. Skechers USA,
Inc. , 890 F.3d 747, 764 (9th Cir. 2018).
ARGUMENT
I. KALSHI IS NOT LIKELY TO SUCCEED ON THE MERITS Kalshi argues that only the CFTC can regulate Kalshi’s sports and
election contracts because the CEA preempts all state regulation of them.
To succeed on that argument, Kalshi must show both that (1) its contracts
1 The sliding-scale approach appears inconsistent with Winter , which re- quires showing a likelihood of success on the merits. See Flathead , 98 F.4th at 1190 & n.12.
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