Kalshi Secures Legal Victory Amid Regulatory Scrutiny
April 28, 2025 — A federal judge has granted Kalshi a preliminary restraining order and a temporary injunction against the New Jersey Division of Gaming Enforcement (NJDGE), bolstering the position of prediction markets in the ongoing legal battle over sports-related event contracts. This ruling follows the NJDGE’s directive for Kalshi and Robinhood to cease operations in New Jersey, claiming violations of state sports betting regulations.
Kalshi, a federally regulated prediction market operator monitored by the Commodity Futures Trading Commission (CFTC), asserts that its contracts for sporting events fall under the CFTC’s jurisdiction, not state laws. The NJDGE contends otherwise, arguing that Kalshi operates without a state license and that its contracts do not possess financial characteristics necessary for CFTC regulation.
Judge Edward Kiel sided with Kalshi, asserting, “I am persuaded that Kalshi’s sports-related event contracts fall within the CFTC’s exclusive jurisdiction.” He dismissed NJDGE’s claims, emphasizing that such contracts could hold significant economic implications.
As Kalshi achieves early victories in legal disputes, the company now faces similar cease-and-desist orders from Maryland and Ohio, highlighting potential challenges for state regulations surrounding prediction markets. The ongoing conflicts reflect a complex legal environment, intensifying competition between established sports betting companies like DraftKings and FanDuel, which are heavily invested in state licensing.
While Kalshi secures a foothold, the ramifications of federal and state regulatory frameworks are far-reaching, particularly as states like New Jersey garnered $138.3 million in online sports betting tax revenue last year. With the stakes high, these battles promise to reshape the future of sports trading regulation.
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