Kalshi wins appeal against New Jersey over sports event contracts

An appeals court has ruled in favor of Kalshi, stating that New Jersey does not have explicit authority over sports-related event contracts offered by entities regulated by the Commodity Futures Trading Commission (CFTC). The U.S. Court of Appeals for the Third Circuit ruled 2-1 that New Jersey gaming regulators cannot prevent Kalshi from offering these contracts within the state. Kalshi had sued New Jersey and other states after receiving cease-and-desist orders, arguing that as a federally regulated commodities exchange, the Commodity Exchange Act supersedes state authority. New Jersey contended that Kalshi's sports contracts violated its gambling laws. The court's majority opinion stated that the Act grants the CFTC exclusive jurisdiction over swaps and event contracts on designated contract markets (DCMs), overriding state claims. The dissenting judge, however, viewed Kalshi's products as sports gambling subject to state regulation. Kalshi's CEO hailed the decision as a significant victory for free markets.

(Source：The Block)