US Third Circuit bars New Jersey from regulating Kalshi prediction market
State gaming regulators cannot block CFTC‑licensed trading platforms offering sports-event contracts
Change
US Court of Appeals for the Third Circuit ruled that the Commodity Futures Trading Commission has exclusive jurisdiction over sports-related swap contracts traded on Kalshi’s CFTC‑licensed designated contract market, preventing New Jersey from enforcing state gambling rules against those listings.
Why it matters
State gaming authorities in the Third Circuit are blocked from using state gambling statutes to force delisting or licensing demands against sports-related swap listings on platforms licensed by the Commodity Futures Trading Commission. That shifts contested enforcement into the federal regulatory framework and removes a primary state-level enforcement lever against these platform listings.
Implications
- — State gaming regulators in New Jersey must immediately suspend enforcement actions (cease-and-desist letters, licensing demands) against CFTC-licensed platforms offering sports-event swap contracts — continuing enforcement risks being set aside by federal courts under preemption.
- — Compliance teams at prediction market operators licensed by the US Commodity Futures Trading Commission (CFTC) must maintain or restore access for New Jersey users now unless a specific court injunction orders otherwise — blocking access absent an injunction removes protections tied to federal oversight and invites legal challenge.
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Source
View on The Guardian