A federal appeals panel has ruled that New Jersey cannot enforce its gambling statutes against prediction‑market operator Kalshi. The 3‑judge majority held that the Commodity Futures Trading Commission’s exclusive jurisdiction over designated contract markets preempts state law, meaning Kalshi’s sports‑event contracts count as swaps, not bets. The decision upholds a district‑court injunction that halted a state cease‑and‑desist letter. The decision also signals a broader test of federal authority over emerging fintech products.

Judge David Porter, writing for the majority, argued that the Commodity Exchange Act’s language “suggests a narrow framing” that limits regulation to trades on CFTC‑licensed DCMs. Circuit Judge Jane Roth dissented, noting Kalshi’s betting page mirrors traditional sportsbooks like DraftKings, and warning that rebranding wagers as swaps merely obscures gambling activity.

The ruling arrives as the CFTC, under Chairman Michael Selig, files lawsuits challenging similar state attempts in Arizona, Connecticut and Illinois, and solicits comment on a unified regulatory framework. Law firms cite roughly 50 pending cases nationwide, underscoring a looming clash between federal preemption and state consumer‑protection regimes. For now, Kalshi can continue offering its event contracts without a New Jersey license.