C. Irreparable harm Kalshi has also met its burden to show a likelihood of irreparable injury without an injunction. The Sixth Circuit has explained that, “[w]hen constitutional rights are threatened or impaired, irreparable injury is presumed.” Vitolo , 999 F.3d at 360 (quoting Obama for Am. , 697 F.3d at 436). The defendants argue that cases involving such a presumption are “almost entirely restricted” to cases involving personal liberties, like freedom of speech, “as to which temporary deprivation is viewed of such qualitative importance as to be irremediable by any subsequent relief.” (Doc. No. 34 at 40 (quoting Pub. Serv. Co. of N.H. v. Town of W. Newbury , 835 F.2d 380, 382 (1st Cir. 1987)).) But the defendants do not meaningfully contend with the Sixth Circuit’s recent opinion, published in December 2025, finding irreparable injury where Michigan’s attempt to enforce a state wagering law against an out-of-state wagering platform was preempted by the Interstate Horseracing Act under the Supremacy Clause. Churchill Downs , 162 F.4th at 635; see also Kalshi D. Nev. I , 2025 WL 1073495, at *7 (“A credible threat of imminent prosecution for a state violation that conflicts with federal law can establish a likelihood of irreparable harm.” (citing Morales v. Trans World Airlines, Inc. , 504 U.S. 374, 381 (1992))). Absent an injunction, Kalshi could either continue its operations in Tennessee and face potential civil and criminal liability, or else attempt to comply. Both options, it argues, constitute irreparable harm. The court agrees. The Letter demands that Kalshi cease offering sports event contracts to people in Tennessee, void all pending contracts entered into by a person in Tennessee, and return deposits for pending contracts. (Doc. No. 1-6 at 3.) Kalshi argues that discontinuing access to the nationwide exchange for its roughly 50,000 Tennessee users would cause lost profits and reputational harm. (Doc. No. 7 at 29.) In addition, because Kalshi operates a nationwide exchange through which traders enter contracts throughout the country, to which Kalshi is not a party—including traders who are only temporarily in Tennessee—determining which contracts to
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Case 3:26-cv-00034 Document 48 Filed 02/19/26 Page 21 of 25 PageID #: 889
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