Kalshi triumphs in legal victories once more, this time in New Jersey, as they obtain a preliminary injunction granted to them.
April 28, 2025, 03:17h
Latest Update:Kalshi won't be halting its sports-related events anytime soon with a preliminary injunction against the New Jersey Division of Gaming Enforcement.
Read More | Asia Pacific Gaming | Commercial Gaming | Legislation | Politics | Kalshi's Victory Against NJ DGE
Kalshi beats the NJ DGE in court, shakes up the betting marketAfter the NJ DGE slapped Kalshi with a cease-and-desist order in March, accusing it of running unauthorized sports betting, a violation of New Jersey's Constitution and Sports Wagering Act, Kalshi fired back with a court complaint. The company argued that its market contracts involving sports outcomes fall under the regulatory scope of the Commodity Futures Trading Commission (CFTC).
The dust has settled, and a federal judge has granted Kalshi's motion for a preliminary injunction. In his opinion, U.S. District Judge Edward Kiel sided with Kalshi, stating that the company's arguments were on point. The financial, economic, and commercial ramifications of such sports-related derivative markets, Kiel argued, defy the DGE's declarations that the contracts are not financial instruments regulated by the CFTC.
Kalshi Triumphs: A Legal Breakthrough
The federal ruling in Nevada that states have no regulatory authority over CFTC-designated exchanges seems to have played a significant role in Kiel's decision. He believed that Kalshi's sports-related event contracts fall within the CFTC's exclusive jurisdiction, disputing the DGE's claims to the contrary.
The CFTC's regulations on event contracts encourage exchanges like Kalshi not to offer contracts deemed harmful to the public interest. These contracts can include those involving politics, elections, terrorism, and war. Kiel agreed that Kalshi's arguments of potential financial and reputational harm from the DGE's cease-and-desist order strengthened its case for a preliminary injunction.
CFTC's Sports Roundtable Canceled
Initially set to host a sports prediction market forum for industry experts, the CFTC canceled the event last week, with no official statements or rescheduling plans yet. The CFTC's delayed approach has left the regulatory landscape murky and uncertain.
Kalshi: The Mover and Shaker
Despite regulatory uncertainties, Kalshi remains undaunted. The platform continues to offer its sports-related event contracts nationwide, claiming it acts under CFTC oversight as a designated control market. Aside from sports, Kalshi recently added a pope succession market and other avant-garde contracts, such as whether Elon Musk and Mark Zuckerberg would engage in a public feud or if Zyn would face a ban in the US this year.
[1] U.S. Commodity Futures Trading Commission: https://www.cftc.gov[2] New Jersey Division of Gaming Enforcement: https://www.nj.gov/oog/[3] California State Legislature: https://leginfo.legislature.ca.gov[4] Nevada Gaming Control Board: https://gaming.nv.gov[5] Federal Trade Commission: https://www.ftc.gov
- Despite the cease-and-desist order from the New Jersey Division of Gaming Enforcement (NJ DGE), Kalshi continues its sports-related events, following a preliminary injunction against the NJ DGE.
- The federal judge's decision in favor of Kalshi challenges the assumptions of the NJ DGE, who claimed that Kalshi's sports-related contracts were not regulated by the Commodity Futures Trading Commission (CFTC).
- The CFTC's regulations on event contracts played a crucial role in the federal ruling, ensuring that exchanges like Kalshi adhere to rules that discourage harmful contracts related to politics, elections, terrorism, and war.
- Notably, the recent ruling in Nevada stating that states have no regulatory authority over CFTC-designated exchanges significantly influenced the judge's decision in siding with Kalshi.
- The CFTC's impending sports prediction market forum for industry experts, scheduled to be hosted by the CFTC, has been canceled, creating uncertainties in the regulatory landscape.
- While the CFTC has not provided any official statements or rescheduling plans for the forum, Kalshi continues to offer various nationwide sports and non-sports related contracts under CFTC oversight as a designated control market.
- In addition to sports, Kalshi has recently introduced contracts for events such as the pope succession and potential public feuds between tech industry leaders.
- As the regulatory landscape evolves, politics and general news remain intriguing subject matters for prediction markets, with potential for growth and innovation in this sector.
