Key Takeaways:
A Third Circuit appeals court ruled 2-1 on April 6, 2026, that federal law blocks New Jersey from enforcing state gambling rules against Kalshi. The decision gives Kalshi federal preemption protection across New Jersey, where the platform reports over $1 billion in weekly trading volume. New Jersey may seek en banc or Supreme Court review, with at least 19 federal Kalshi lawsuits still pending nationwide. Kalshi Scores Federal Court Win as Third Circuit Strikes Down New Jersey Cease-and-DesistU.S. District Judge Edward S. Kiel sided with Kalshi on April 28, 2025, finding the company was likely to prevail because its event contracts fall within the CFTC’s exclusive authority. New Jersey appealed to the Third Circuit, which heard oral arguments Sept. 10, 2025.
The Third Circuit majority held that because Kalshi operates under federal oversight as a CFTC-regulated exchange, its event contracts are governed by federal commodities law. State gaming statutes cannot override that authority. The court’s decision shields Kalshi from the DGE’s enforcement actions in New Jersey.
District courts across the country have not reached uniform conclusions. Kalshi has won injunctive relief in New Jersey and Nevada. It has faced adverse rulings in Maryland, Massachusetts, and Ohio. Appeals are pending in the Third, Fourth, Ninth, and other federal circuits.
Legal observers have noted the split creates conditions for eventual Supreme Court review. The Third Circuit’s preemption ruling could carry weight in other pending appeals, though it binds only courts within the circuit.
Kalshi has publicly maintained its platform is legal in all 50 states. The company did not issue an immediate public comment following the April 6 decision. The New Jersey Attorney General’s office declined to comment in related coverage.
The ruling allows Kalshi to continue operating in New Jersey without state interference on sports contracts. Traditional sportsbooks, which pay licensing fees and state taxes, have raised concerns about competing with federally regulated platforms that operate outside those frameworks. Age verification and collegiate sports integrity remain open policy questions.
