A U.S. court ruled that New Jersey has no authority to restrict Kalshi sports prediction contracts

According to The Block, the U.S. Third Circuit Court of Appeals ruled that Kalshi's provision of sports-related event contracts in New Jersey is not subject to state gambling regulations, confirming the priority of federal oversight.

The court ruled 2-1 that trading on designated contract markets (DCM) regulated by the Commodity Futures Trading Commission (CFTC) falls under federal exclusive jurisdiction, and New Jersey does not have the authority to block the provision of related products.

This case originated from Kalshi's lawsuit after receiving "cease and desist" orders from multiple states. New Jersey claimed that it violated state gambling laws, but the court found that the Commodity Exchange Act clearly grants the CFTC exclusive regulatory authority over related trading. Kalshi CEO Tarek Mansour called the ruling a "significant victory" and stated that prediction markets offer greater transparency and fairness.