Kalshihas won the first federal appeals court ruling on whether states can regulate prediction markets.
The Third Circuit Court of Appeals on Monday ruled by 2-1 that the Commodity Exchange Act preempts New Jersey’s gambling laws, finding that Kalshi’s sports event contracts are federal derivatives governed by the CFTC, not state-regulated bets.
What’s The Fight About
Since the Supreme Court struck down the federal sports betting ban in 2018, states have controlled whether and how to legalize sports wagering.
Roughly 40 states now have legal sportsbooks, all licensed and taxed at the state level.
Kalshi’s argument upends that framework.
The company says its contracts are not bets but financial derivatives listed on a CFTC-registered exchange.
If you offer a contract on the Super Bowl or a presidential election through a designated contract market, it is a federal matter and states …
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