US Court Sides With Kalshi Over New Jersey Gaming Rules

A federal appeals court in the United States has ruled that gaming regulators in New Jersey are prohibited from restricting the operations of Kalshi's prediction market within the state. The decision, handed down on Monday, ensures that residents can continue to utilize the platform to place financial bets on the outcomes of various sporting events. The Philadelphia-based 3rd U.S. Circuit Court of Appeals issued a 2-1 ruling in favor of Kalshi. The judicial panel concluded that the Commodity Exchange Act (CEA) is the governing authority over the sports-related event contracts offered by the company. Because these contracts fall under federal jurisdiction, the court found that the CEA preempts existing state laws that might otherwise allow for local regulation or prohibition. This legal victory for the prediction market platform clarifies the regulatory landscape for event-based financial contracts. By siding with Kalshi, the court has limited the ability of individual states to impose their own gaming rules on products that are already subject to federal oversight through the Commodity Futures Trading Commission's governing statutes.