New Jersey's Casino Association Engages in Battle Against Kalshi
Published on: June 17, 2025, 07:06h.
Last modified on: June 17, 2025, 07:06h.
Todd Shriber (@etfgodfather) ** || Finance | Gaming Business | Mergers & Acquisitions**
New Jersey Casino Association Files Brief in Support of State's Case Against Kalshi
- Joining the growing list of groups opposing prediction market operators
- Mirroring a similar move in Nevada earlier this month
In a bold move, the Casino Association of New Jersey (CANJ) today rolled out an amicus brief in favor of the state's appeal against a preliminary injunction previously awarded to the prediction markets titan, Kalshi. This supports the state's attempts to regulate sports derivatives contracts traded on the Kalshi platform.
It's essential to note that CANJ is the representing body for the nine Atlantic City casinos, joining a chorus of groups including the American Gaming Association (AGA), anti-predatory gaming entities, states, and tribal casino operators who have shown opposition to prediction market operators like Kalshi.
Originally, the New Jersey Division of Gaming Enforcement issued a cease-and-desist order to Kalshi in March, but in April, the prediction markets firm emerged victorious after winning a preliminary injunction against the regulator. The bone of contention is Kalshi and competitors offering sports derivatives contracts, including in states where sports wagering isn't legal, without obtaining the necessary state gaming licenses.
According to the CANJ brief, "This case boils down to sports gambling."kanshi and corresponding entities offer online sports betting through events contracts on the futures marketplace. Kalshi itself has branded these practices as 'sports betting.'"
Numerous states, including New Jersey, with substantial land-based casino and burgeoning sports wagering industries, have issued cease-and-desist letters to Kalshi, contending that the company is flouting state gaming laws since it lacks the relevant licenses in those jurisdictions.
Precedent for CANJ's Counter Move
The CANJ isn't the first casino trade group to challenge Kalshi. Earlier this month, the Nevada Resort Association (NRA) found itself involved in Nevada's legal skirmish with the futures market operator.
"If Kalshi wins this case, NRA members may be confronted with a significant competitive disadvantage," Judge Andrew Gordon said in his ruling, as Kalshi and other like firms would not have to adhere to Nevada's comprehensive gaming laws, including restrictions on bettors under 21 and the types of wagers permitted.
In February, the Nevada Gaming Control Board (NGCB) delivered a cease-and-desist letter to Kalshi, ordering it to halt its activities in Nevada by March 14. However, in April, Judge Gordon granted the company a preliminary injunction, citing the likelihood of Kalshi effectively arguing its case while the NGCB might struggle to do the same.
Nevada and New Jersey, the two largest casino markets in the United States and homes to two of the biggest sports wagering markets, were among the first to lend their support to challenges against Kalshi – actions primarily triggered by the company's foray into sports event contracts.
Kalshi's Defense Leans on Federalism
In its state-level legal disputes, Kalshi capitalizes on the argument that it is regulated by the federal Commodities Futures Exchange Commission (CFTC) and that the Commodity Exchange Act (CEA) grants precedence for the offering of futures contracts banned in some states.
At an April conference, CEO Tarek Mansour of Kalshi highlighted that Kansas disallows grain futures trading, but because that activity is overseen federally, the state cannot halt it. Kalshi believes that it meets the standards for futures contracts set forth in the CEA. However, the CANJ contends that this doesn't extinguish states' authority to regulate sports betting and points to portions of the statutory scheme that overtly uphold the application of state law.
In the CANJ's amicus brief, it cites US code and states that "The Commodity Exchange Act's language does not clearly indicate that Congress intended to strip States of their traditional power to regulate sports gambling." The brief also cautions that weakening states' abilities to oversee sports betting could pose potential hazards to vulnerable bettors.
[1] https://abcnews.go.com/US/wireStory/attorneys-general-sue-kentucky-firm-sports-betting-loophole-74611644[2] https://www.cpomagazine.com/2023/06/16/kalshi-kentucky-sports-betting-cease-and-desist/[3] https://www.bizjournals.com/newyork/news/2023/06/08/kalshi-may-face-possible-ny-ban.html[4] https://www.sportscoalition.org/aboutsports-coalition/operations-center/positions/federally-registered-prediction-market-operators/
- The sports-betting industry is under increasing scrutiny, with the Casino Association of New Jersey (CANJ) joining regional news about opposition to prediction market operators like Kalshi for sports derivatives contracts traded on the Kalshi platform.
- In a similar move to the Nevada Resort Association earlier this month, the CANJ, representing the nine Atlantic City casinos, has filed an amicus brief in support of New Jersey's case against Kalshi, aiming to regulate sports-betting activities in line with state gaming laws.
- With growing concerns about the regulatory environment of sports betting, Kalshi's defense on federalism may not be enough to avoid state-level challenges like the one presented by the CANJ, highlighting the need for further discussions on the balance between federal and regional powers in the sports-betting landscape.
