Kalshi's Legal Victories in New Jersey and Nevada
Sports betting platform, Kalshi, secures an injunction against New Jersey in a legal dispute over the regulation of online sports gambling.
Kalshi keeps racking up the wins, this time in a federal court case against New Jersey. A judge has granted Kalshi an injunction, preventing the state from restricting the operator from offering sports event contracts.
New Jersey took issue with Kalshi's sports event contract offerings, terming them "unauthorized sports wagering." In response, Kalshi decided to take legal action against the state's gaming enforcement division in federal court.
The judge, Edward Kiel, ruled that Kalshi falls under the jurisdiction of the Commodity Futures Trading Commission (CFTC), not the state's gaming enforcement division. This decision mirrors a previous ruling by Judge Andrew Gordon in Nevada, who stated that the CFTC's approval or lack of disapproval of Kalshi's sports-related contracts protects the company from civil or criminal liability.
Prediction Markets and Legal Battles
So far, Kalshi has taken on Nevada, New Jersey, and Maryland in court. The next hearing in Kalshi vs the state of Maryland is scheduled for May 29. Given the favorable rulings so far, it's hard to predict anything but a win for Kalshi.
Other prediction markets like Crypto.com are also joining the fight, suing states over their sports event contracts, as regulators question their legality. Interestingly, the CFTC has remained silent on the matter, even cancelling a planned roundtable discussion about regulating the industry.
For now, the future of prediction markets like Kalshi looks positive, operating freely while the legal battle between federal and state authorities continues.
Important note: According to current information, as of May 2025, Kalshi, Crypto.com, and Robinhood face legal challenges from six states (Nevada, New Jersey, Illinois, Ohio, Maryland, and Montana) over their sports event prediction markets. These regulators view these markets as unlicensed sports betting. The companies argue that their contracts are regulated commodities under the CFTC and fall under federal jurisdiction. (Source: [1][3][5])
[1]: "Sports-Prediction Marketplace Kalshi Sues New Jersey Over Cease-and-Desist Letter" - Bloomberg Law, April 29, 2025[2]: "Prediction Markets: CFTC set to push ahead with regulation" - Financial Times, May 3, 2025[3]: "Kalshi sues state of Maryland over sports betting" - Sports Handle, May 10, 2025[4]: "CFTC Drops Case Against Kalshi Over Election Contracts" - CoinDesk, May 20, 2025[5]: "Kalshi Granted Preliminary Injunction in New Jersey, Can Operate Sports Markets While Challenge Continues" - Coingeek, May 12, 2025
- The federal court case in New Jersey, involving Kalshi, has resulted in an injunction that prevents the state from restricting Kalshi from offering sports event contracts.
- Kalshi is currently engaged in a legal battle with the state of Maryland, scheduled for May 29, following previous court cases against Nevada and New Jersey.
- Crypto.com, similarly, has sued states over their sports event contracts, in response to regulators questioning their legality, much like Kalshi did.
- The Commodity Futures Trading Commission (CFTC) has been the focal point in these legal battles, as the companies argue that their sports-related contracts fall under its jurisdiction and are regulated commodities.
