06.04.2026 16:59
A federal appeals panel in the Third Circuit has delivered a decisive blow to New Jersey’s attempt to curb Kalshi’s operations. On April 6, 2026, the three‑judge panel voted 2‑1 to declare that the federal Commodity Exchange Act shields Kalshi from the state’s gambling prohibitions, effectively granting the company nationwide preemption.
The judges affirmed an earlier injunction that barred the New Jersey Division of Gaming Enforcement from enforcing a cease‑and‑desist notice against the firm. Their opinion hinged on the principle that Kalshi’s contracts—tied to outcomes such as the Super Bowl, NCAA tournaments and other sporting events—are regulated exclusively by the Commodity Futures Trading Commission, not by state gaming statutes.
Kalshi, launched in 2018 and certified by the CFTC as a designated contract market in 2020, has grown into a prolific predictor‑market platform. The firm collects a fee on each trade rather than assuming market risk, and by early 2026 it was processing more than a billion dollars in weekly transactions. The company’s model allows users to wager on real‑world events without directly betting against Kalshi.
New Jersey’s enforcement action began in March 2025, when the Division of Gaming Enforcement issued a cease‑and‑desist order alleging that the platform’s sports‑related contracts violated the state’s Sports Wagering Act. Concerns centered on collegiate‑event betting and the exposure of minors to the service. Kalshi responded by filing a federal lawsuit, arguing that the CFTC’s jurisdiction supersedes state regulation under the Supremacy Clause.
Judge Edward S. Kiel echoed the sentiment, finding sufficient evidence that Kalshi would prevail because its event contracts fall squarely within the CFTC’s exclusive authority. While the state may still seek en banc rehearing or petition the Supreme Court, defendants elsewhere—at least nineteen pending cases nationwide—continue to challenge similar regulatory attempts. The ruling thus not only secures Kalshi’s current marketplace but also sets a precedent that federal oversight can preempt state gambling bans in the realm of event‑based prediction markets.
