<\/p>\n
A US appeals court sided with Kalshi, ruling that CFTC\u2011regulated event contracts fall under federal law, not New Jersey gambling rules, reshaping prediction market oversight.<\/p>\n
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A federal appeals court has ruled that New Jersey cannot bar Kalshi from offering sports\u2011related event contracts in the state, declaring that the Commodity Exchange Act and the Commodity Futures Trading Commission (CFTC) hold exclusive authority over those markets. In a 2\u20111 decision, the 3rd U.S. Circuit Court of Appeals in Philadelphia held that trading on Kalshi\u2019s designated contract market is governed by federal derivatives law, not state gambling codes, effectively blocking New Jersey regulators from enforcing their cease\u2011and\u2011desist order. The ruling cements a major legal win for Kalshi, which has argued for years that its contracts are swaps and hedging tools rather than traditional sports bets.<\/p>\n
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The case stems from a series of cease\u2011and\u2011desist letters sent by New Jersey in 2025, accusing Kalshi\u2019s sports markets of violating the state\u2019s Sports Wagering Act and constitution and threatening fines of up to $100,000 per violation. Kalshi sued in federal court, claiming that, as a CFTC\u2011regulated designated contract market, its event contracts sit squarely within federal jurisdiction and are \u201ca type of \u2018swap\u2019 regulated by the Commodity Exchange Act.\u201d A New Jersey federal judge had already granted Kalshi a preliminary injunction in 2025, writing that he was \u201cpersuaded that Kalshi\u2019s sports\u2011related event contracts fall within the CFTC\u2019s exclusive jurisdiction,\u201d a view the 3rd Circuit has now largely endorsed.<\/p>\n
The appeals court\u2019s opinion aligns with Kalshi\u2019s broader strategy as it fights regulators in multiple states, including Nevada, Maryland, and Tennessee, over whether its markets are illegal gambling or federally protected derivatives. In Tennessee, for example, U.S. District Judge Aleta Trauger recently granted a temporary restraining order halting enforcement of that state\u2019s cease\u2011and\u2011desist order, finding that Kalshi is likely to succeed on its argument that federal law preempts state gambling statutes. More broadly, the CFTC and U.S. Department of Justice have escalated the fight by suing Arizona, Connecticut, and Illinois over what CFTC Chair Mike Selig called \u201caggressive and overzealous attempts to overstep the CFTC\u201d in their efforts to police prediction markets.<\/p>\n
Responding to the New Jersey decision, Kalshi co\u2011founder and CEO Tarek Mansour called the appeals ruling a \u201csignificant victory\u201d and argued that regulated prediction markets \u201coffer greater transparency and fairness\u201d than opaque traditional betting channels. In earlier commentary, Mansour has said that prediction markets can outperform conventional financial instruments by delivering \u201cclean, crowd\u2011driven probabilities instead of noisy headlines,\u201d framing platforms like Kalshi as information infrastructure rather than casinos. The decision also lands as rivals such as Polymarket secure their own CFTC approvals, with the agency \u201ceffectively welcoming\u201d Polymarket into the club of fully regulated U.S. exchanges and binding it to full designated\u2011contract\u2011market\u2011style surveillance and self\u2011regulatory duties.<\/p>\n
Despite the 3rd Circuit win, Kalshi\u2019s regulatory risk is far from over. A Nevada judge recently extended a ban preventing the company from offering event\u2011based contracts in that state, underscoring the fragmented legal landscape facing prediction platforms. At the federal level, a bipartisan group of U.S. senators has floated legislation to ban sports\u2011bet and casino\u2011style contracts on CFTC\u2011regulated prediction markets altogether, raising the prospect that Congress, not just courts, will decide how far companies like Kalshi can push into sports.<\/p>\n
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A US appeals court sided with Kalshi, ruling that CFTC\u2011regulated event contracts fall under federal law, not New Jersey gambling rules, reshaping prediction market oversight. Summary U.S. appeals court says…<\/p>\n","protected":false},"author":1,"featured_media":12839,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-25167","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/25167","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/comments?post=25167"}],"version-history":[{"count":1,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/25167\/revisions"}],"predecessor-version":[{"id":25168,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/25167\/revisions\/25168"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media\/12839"}],"wp:attachment":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media?parent=25167"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/categories?post=25167"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/tags?post=25167"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}