The Third Circuit Court of Appeals ruled this past April that Kalshi’s offerings were subject to the federal Commodity Exchange Act, which in turn preempted the New Jersey’s state gambling laws.
The 2-1 appeals court panel ruling pointed to the CFTC, saying the regulator had not made a determination that Kalshi’s sports-related products were contrary to the public interest. The dissenting judge said that the actual products on Kalshi’s platform were just sports bets.
However, just last week, the Ninth Circuit Court of Appeals — a jurisdiction which includes states like Nevada — ruled that the CEA “likely does not preempt” the state’s regulations for sports contracts, teeing up a circuit court split.
After the ruling, CFTC spokesman Zach Fulton told CoinDesk in an email that the ruling “call[ed] out for resolution by the Supreme Court.”
New Jersey petitioning for writ of certiorari does not necessarily mean the Supreme Court will take up the case. There are dozens of other state and federal court cases examining the same question, and the high court may choose to wait for some of these cases to begin resolving before wading into the matter.
