A federal court panel has ruled that the New Jersey Division of Gaming Enforcement (NJDGE) is unable to prevent Kalshi from offering sports event contracts in the state.
The three-judge panel of the Third US Circuit Court of Appeals voted 2-1 in Kalshi’s favour, decreeing that the Commodity Futures Trading Commission (CFTC) has exclusive jurisdiction over the exchange’s sport-related event contract offering.
The landmark ruling marks the first time a federal appeals court has sided with a prediction markets platform over a dispute with a state regulator.
The NJDGE first issued Kalshi and fellow prediction markets platform Robinhood with cease-and-desist orders in March 2025, alleging the offering unfairly circumvented state sports betting regulations regarding betting on college sports.
This prompted Kalshi to file a lawsuit against the regulator in response, claiming its event contracts should be classed as ‘swaps’, which would require the oversight of the CFTC, the federal regulator for derivatives markets.
Kalshi was eventually granted a preliminary injunction and temporary restraining order (TRO) against the NJDGE by the state’s District Court, leading the regulator to launch an appeal.
In a post on X, Kalshi CEO Tarek Mansour hailed the ruling as a “big win for the industry”.
He wrote: “The Third Circuit ruled in Kalshi’s favour. People use prediction markets because they’re more fair, transparent and reward being right.
“Free markets work. We should keep them that way. This is a big win for the industry and millions of users.”
Ongoing regulator resistance
New Jersey’s Attorney General (AG) Jennifer Davenport said the decision will allow “certain companies to offer sports gambling in our states without following the careful gaming rules that everyone else follows”.
Davenport’s office could still appeal the decision and ask the court to rehear the case.
Kalshi has encountered continued resistance from state regulators in recent months.
The exchange was blocked in the state of Nevada for two weeks last month after the Nevada Gaming Control Board (NGCB) filed a request for a TRO.
Washington Attorney General Nick Brown filed a lawsuit against Kalshi on 27 March, weeks after his Arizona counterpart Kris Mayes filed criminal charges against the platform.
In January, a Massachusetts judge ruled Kalshi was unable to offer sports event contracts in the Bay State.
A bill to ban prediction market bets on elections, sports and military and government actions was introduced to the US Senate and House of Representatives last month by Maryland representative Jamie Raskin and Oregon Senator Jeff Merkley.
This followed US senators Adam Schiff and John Curtis filing a bipartisan bill designed to prevent prediction markets from listing sports event contracts.
Despite the regulatory headwinds, reports suggested Kalshi raised more than $1bn in its latest funding round led by Coatue Management, leaving the company with a $22bn valuation.
Several sports betting operators have also entered into the prediction markets space as the vertical grows in popularity across the US.
The likes of FanDuel, DraftKings and Fanatics have all launched their own prediction markets in the last few months.
The post Kalshi secures landmark legal victory against New Jersey regulator after year-long battle first appeared on EGR Intel.
Predictions market hails “big win” as Federal court panel rules Commodity Futures Trading Commission has exclusive jurisdiction over firm’s sports-related event contracts
The post Kalshi secures landmark legal victory against New Jersey regulator after year-long battle first appeared on EGR Intel.