Kalshi Wins New Jersey Injunction to Keep Sports Contracts Live
New Jersey federal court handed Kalshi, a prediction market operator, a major victory by granting a preliminary injunction against the New Jersey Division of Gaming Enforcement (NJDGE).
A Big Legal Win in the Garden State
“Kalshi’s sports-related event contracts fall within the CFTC’s exclusive jurisdiction,” wrote Judge Edward Kiel, allowing Kalshi to continue offering sports event contracts during ongoing litigation.
This ruling, the second federal win after Nevada’s injunction, blocks NJDGE’s March cease-and-desist order claiming Kalshi ran unlicensed sports betting.
Judge Kiel rejected NJDGE’s claim that sports outcomes lack “potential financial, economic, or commercial consequence,” stating, “On the record before me, I disagree.” He affirmed that Kalshi’s contracts, overseen by the Commodity Futures Trading Commission (CFTC), hold economic value and fall “under the CFTC’s supervision,” preempting state laws.
Federal vs. State Control
The core issue is whether Kalshi’s contracts, regulated federally by the CFTC, fall under state gambling laws. Kiel cited Nevada’s ruling, noting that NJDGE’s actions could harm Kalshi’s business and reputation, justifying the injunction.
“Kalshi’s sports-related event contracts do not fall under the CEA,” NJDGE argued, but Kiel countered that federal law prevails. Kalshi faced NJDGE’s order alongside Robinhood, which paused its sports markets.
Kalshi’s legal fights extend beyond New Jersey. It sued Maryland after a cease-and-desist order, with a ruling pending, and faces orders in Ohio, Illinois, and Montana.
“Kalshi is entitled to declaratory and injunctive relief to prevent [states] from enforcing their preempted state laws,” the company argued in its lawsuits. Ohio extended Kalshi’s compliance deadline to May 15.
The CFTC’s canceled April 30 roundtable leaves regulatory clarity uncertain.
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