A federal appeals court ruled on Apr. 6 that Kalshi can keep offering sports-related event contracts in New Jersey, with the majority holding that those markets fall under the Commodity Futures Trading Commission rather than state gambling regulators.
The decision gives the company its strongest court win yet in a dispute that now appears increasingly likely to reach the U.S. Supreme Court.
Kalshi Ruling
The U.S. Court of Appeals for the Third Circuit upheld a preliminary injunction that had blocked New Jersey from enforcing its cease-and-desist order against Kalshi, and the panel split 2-1 in the company’s favor.
The majority said federal law preempts the state’s attempt to regulate the platform’s sports-event contracts, which Kalshi says are lawful event contracts listed on a federally regulated market.
The two judges in the majority were Chief Judge Michael A. Chagares and Judge David J. Porter.
In dissent, Judge Jane R. Roth argued the contracts remain sports gambling in substance, writing that Kalshi’s labeling does not change their basic nature.
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State Fight
The ruling builds on an earlier decision from a federal judge in New Jersey, who found last year that Kalshi was likely to succeed on the merits while the case moved forward.
New Jersey had argued the company was offering unlicensed sports betting, while Kalshi maintained that only the CFTC has authority over its listed contracts.
The split is sharper elsewhere.
A Nevada judge extended a temporary ban on Kalshi on Apr. 3, showing that courts in different states are still reaching different answers on the same core question.
Supreme Court Path
The wider fight has already drawn in the Trump administration, which on Apr. 2 joined the CFTC in suing Illinois, Arizona and Connecticut over state efforts to police prediction markets.
That federal push, combined with conflicting state and federal rulings, is increasing the odds that the Supreme Court will eventually decide who controls the fast-growing sector.
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