Overview
- The dispute sharpened this week when the NFL filed a public amicus brief urging the Supreme Court to hear New Jersey’s petition and let states police sports-linked prediction contracts, and Kalshi’s CEO warned that state control would push markets offshore.
- The Commodity Futures Trading Commission has put a rule in effect and a broader proposal under public comment that would treat many event contracts as swaps under federal law while excluding casino-style gambling, adding regulatory muscle to the industry’s federal claim.
- Federal appeals courts are split, with the Third Circuit siding with Kalshi’s federal-preemption argument and the Ninth and Sixth Circuits siding with states, a division that prompted New Jersey’s Supreme Court petition supported by roughly 39 states, the District of Columbia, and tribal nations.
- State actions have real business effects: courts in Nevada, Massachusetts, Michigan, and Washington have issued orders limiting Kalshi’s sports markets and the company is litigating in about 20 states while sports-related contracts — once roughly 95% of Kalshi’s 2025 revenue — have fallen to about two-thirds by mid-2026.
- Key near-term items to watch are Kalshi’s required response to the Supreme Court petition by November 9 and the CFTC’s open comment period on its proposed rule, which together will shape whether the fight ends in a single federal framework or a patchwork of state regimes.