Overview

• Oral arguments were heard on September 10, and the Third Circuit’s decision is pending.
• Judges pressed New Jersey on the broad statutory definition of a “swap,” with Judge Michael Chagares noting its breadth and Judge David J. Porter seeking concrete examples that would fall outside it.
• New Jersey emphasized a presumption against preemption, while Kalshi argued the Commodity Exchange Act grants the CFTC exclusive jurisdiction over designated contract markets.
• Kalshi advanced conflict-preemption concerns by citing state rules that confine sports bets to in-state bettors, which it said cannot be reconciled with a nationwide federally regulated exchange.
• The case stems from an April 2025 district court ruling for Kalshi that New Jersey appealed, and its outcome could shape how states regulate prediction markets alongside CFTC oversight.