The US Court of Appeals for the Third Circuit in New Jersey has ruled that the Commodity Futures Trading Commission (CFTC) has “exclusive jurisdiction” over Kalshi and the trading of sports-related event contracts.
Court officials also ruled that New Jersey regulators, such as the state’s Division of Gaming Enforcement (DGE), are prohibited from attempting to prevent Kalshi from offering prediction markets to eligible residents.
"Kalshi's sports-related event contracts are swaps traded on a CFTC-licensed (designated contract market) DCM, so the CFTC has exclusive jurisdiction," the court ruled.
The case first began when New Jersey regulators issued a cease-and-desist order to Kalshi during 2025, alleging the operator’s listing of sporting event contracts violated state gambling laws which prohibit betting on collegiate sports.
Kalshi responded by filing a lawsuit against the state, where it first argued that its event contracts are a type of derivative contract, described as “swaps,” and can only be regulated by the CFTC.
The CFTC currently maintains exclusive jurisdiction to regulate event contracts under the Commodity Exchange Act, but the legislation has not stopped fellow states from attempting to ban operators such as Kalshi from conducting business.
As recently as April 6, Kalshi was prohibited from offering contracts related to sporting events in Nevada, following a ruling from Carson City District Court Judge Jason Woodbury.
On March 31, Attorney General Nick Brown also filed a lawsuit against Kalshi, alleging the online platform violated state law by offering unlawful gambling products to consumers in Washington State.
Polymarket made news by unveiling intentions to upgrade its trading engine, enhance smart contracts and introduce a new collateral token titled Polymarket USD.
The operator will close all open orders while the multi-week maintenance window is open, but confirmed it will provide “plenty of notice” to bettors and announce the completion date of its updates “at least one week in advance.”
Kalshi and Polymarket launched new safety guidelines on March 23, seeking to prevent insider trading efforts on prediction markets, including those conducted by politicians, athletes and ‘other relevant people’
