Kalshi has been granted a temporary restraining order (TRO) and a preliminary injunction against the New Jersey Division of Gaming Enforcement (NJDGE) by the state’s US district court.
The prediction markets platform filed its lawsuit against the Garden State regulator last month in response to the NJDGE’s cease-and-desist order, on the grounds that the bid to halt Kalshi’s sports contract offering was unlawful.
Kalshi argued that it is regulated at federal level by the Commodity Futures Trading Commission (CFTC) and therefore state-level authorities like the NJDGE do not possess the power to prevent the rollout of its sports event contracts, despite ongoing disputes that the vertical is effectively unauthorised sports betting and in violation of state law.
After receiving the cease-and-desist order, Kalshi requested a TRO and preliminary injunction to ensure the New Jersey regulator could not legally block its sports event contracts, which are accessible to users aged 18 and over in all 50 US states.
The NJDGE filed its own opposition to Kalshi’s motion, stating that the contracts should not fall under the CFTC’s remit as they are not financial in nature, unlike the bulk of other event contracts that are linked to things like future prices of commodities.
Judge Edward Kiel sided with Kalshi, noting: “I am persuaded that Kalshi’s sports-related event contracts fall within the CFTC’s exclusive jurisdiction and am unconvinced by the defendant’s [NJDGE] arguments to the contrary.
“[The] Defendants argue that sporting events are without potential financial, economic or commercial consequence. On the record before me, I disagree.”
Sara Slane, a key figure within the Kalshi hierarchy and the its head of corporate development, took to LinkedIn to comment on the prediction markets platform’s court victory.
“We are grateful for the court’s attention and well-reasoned opinion. Once again, the decision is consistent with what we have stated from the beginning: Kalshi is firmly on the right side of the law,” Slane wrote.
“We look forward to a swift resolution of these cases and will continue to educate regulators and the public on the benefits of prediction markets and the stringent federal regulations under which we operate.”
Slane’s comments appear to allude to other court cases Kalshi is currently embroiled in, with the New York-based firm having filed suits against both the Nevada Gaming Control Board (NGCB) and the Maryland Lottery and Gaming Control Commission (MLGCC) in recent months.
The company secured a similar victory against the NGCB earlier this month, after US District Court Judge Anthony Gordon ruled in favour of Kalshi and its request for a preliminary injunction against the Nevada regulator.
There has not yet been a decision in its battle with the MLGCC, though the Old Line State regulator will be fighting on two fronts after Crypto.com also filed a lawsuit against it in response to a cease-and-desist order.
The MLGCC issued orders for Kalshi, Crypto.com and Robinhood in one fell swoop, but two of the three have now pushed back.
Nick Lundgren, Crypto.com’s chief legal officer (CLO), outlined the firm’s stance on the matter: “The law is very clear for derivatives and prediction market event contracts, and we are proud to offer these services through a fully compliant and regulated platform.
“Our decision to sue the MLGCC is necessary at this time, and we are fully confident that the existing laws will be recognised and upheld in our favour.”
Crypto.com has also noted that the threat of action from the Maryland regulator will “imminently and irreparably harm” the Singaporean exchange’s offering.
The filing makes reference to Kalshi’s win over the NGCB in a bid to reach a similar outcome.
The post Kalshi secures court victory over New Jersey regulator amid sports contract dispute first appeared on EGR Intel.
Company’s head of corporate development insists it is “firmly on the right side of the law”, while Crypto.com also files lawsuit against another state regulator
The post Kalshi secures court victory over New Jersey regulator amid sports contract dispute first appeared on EGR Intel.