A federal appeals court ruled for Kalshi against New Jersey
The Third Circuit held sports event contracts are swaps and the CEA preempts New Jersey gaming law. Kalshi won, on the record.
New Jersey is the state where Kalshi won at the highest level so far, and it is the reason no honest page can give you a single national answer.
On 6 April 2026 the United States Court of Appeals for the Third Circuit affirmed a preliminary injunction stopping New Jersey from enforcing its gaming laws against Kalshi's sports event contracts. We downloaded and read that opinion.
Three questions get answered as though they were one
Most state lists you will find are answering a different question from the one in their headline. The three that get run together:
- Is it lawful for me to trade here? State law.
- Will the platform let me in? Geofencing, which the platform sets and can change without notice.
- Am I eligible for the sign-up promo? A marketing offer.
The state legality hub sets out which attorneys general have taken a position on the record, across all fifty-one jurisdictions, and Kalshi legality by state indexes every state with a court record in one line each.
What follows, and where it comes from
New Jersey signed the 37-state brief. The rest of this page is New Jersey specific. Where a claim rests on reporting rather than on a document we read ourselves, it says so at that point rather than in a footnote.
The case, in full
KalshiEX v. Mary Jo Flaherty; Division of Gaming Enforcement; James T. Plousis; Alisa Cooper; Casino Control Commission; Matthew J. Platkin; Joyce Mollineaux, No. 25-1922, on appeal from the United States District Court for the District of New Jersey, Judge Edward S. Kiel, No. 1:25-cv-02152. Before Chief Judge Chagares and Circuit Judges Porter and Roth. Argued 10 September 2025, decided 6 April 2026. The appellants were Mary Jo Flaherty and Matthew J. Platkin.
What the court actually held
The Third Circuit affirmed. In its own words, the Act “preempts state laws that directly interfere with swaps traded on DCMs”, and “sports-related event contracts are swaps traded on a CFTC-licensed DCM, so the CFTC has exclusive jurisdiction”. On the swap question it wrote that “because sports-related event contracts are traded on a CFTC-licensed DCM and depend on event outcomes associated with economic consequences, they fit within swaps”.
The reasoning about Congress
The court read the statutory history as deliberate: Congress created the CFTC and amended the Act “to do away with the patchwork of state regulations and bring futures trading on DCMs under the exclusive jurisdiction of the CFTC”. It also noted Congress “recognized that while event contracts could involve gaming, the CFTC has discretionary power to review and prohibit those contracts”. In other words, the gaming character of a contract was contemplated, and the remedy Congress provided was CFTC review rather than state enforcement.
This is the direct opposite of Connecticut
Four months later a federal district judge in Connecticut held that sports event contracts are not swaps, because a result is not an occurrence. The Third Circuit held they are, because they depend on outcomes associated with economic consequences. One is a published court of appeals decision, the other a district court denying a preliminary injunction, and they read the same statutory definition in opposite directions. See Connecticut.
A naming point worth being precise about
The amicus brief behind our hub lists Jennifer Davenport as New Jersey's attorney general. The Third Circuit appellant is Matthew J. Platkin. Both are what the respective documents say; we have not researched the transition between them and do not assert one.
The provisions in play
| Provision | What it covers |
|---|---|
| Commodity Exchange Act, exclusive jurisdiction over DCMs | the provision the holding turns on |
| New Jersey gaming law and the state constitutional provision on collegiate sports betting | the state law held preempted |
Section numbers are given so you can look them up. Where we have not read the provision directly, the sources list says so.
What we could not verify
- Anything after 6 April 2026 in this case. We read the opinion, not the docket, so we do not know whether further review was sought.
- The district court opinion below. Not retrieved.
- Whether New Jersey has taken any step since. Not researched.
- How the Third Circuit decision interacts with the Massachusetts case. They are different courts and different postures, and we are not lawyers.
Questions people actually type
Is Kalshi legal in New Jersey? There is no yes or no here that would be honest. This page sets out what New Jersey has actually done, what its law says, and what a court has or has not decided, so you can see the state of play rather than a verdict nobody has issued.
Has New Jersey taken action against Kalshi? The section above answers this for New Jersey specifically. Across the country, reporting we read describes fifteen states having sued, investigated or sent cease-and-desist orders over gambling licensure. The states differ, and a page that gives one national answer is flattening that.
Does the CFTC designation settle it? No. Kalshi is a CFTC-designated contract market and nobody disputes that. Whether the designation displaces state gaming law is the contested question, argued through 7 U.S.C. section 2(e) and the clear-statement rule in Whitman, 531 U.S. 457, 468 (2001). Two federal district courts have answered it differently.
Can I be prosecuted for trading in New Jersey? We are not lawyers and this is not legal advice. The filings we read are about whether the exchange may offer the contracts, not about individual traders. If that is your real question it is one for someone licensed to answer it in New Jersey.
Is the app blocked in New Jersey? We have not tested it. Geofencing is a platform setting that changes without notice and is a different question from legality.
How many states are arguing this? Thirty-seven states plus the District of Columbia signed the brief, which is 38 jurisdictions, and Massachusetts is separately the party bringing the case. The full signature block is on the state legality hub.
What this page is not
It is not legal advice and we are not lawyers. It is a reading of public documents and reporting, all linked, so you can check it yourself.
Sources
Everything on this page is attributed to the document it came from, and where we read reporting about a court order rather than the order itself, the page says so in the body as well as here. Read direct on 20 Aug 2026 unless stated otherwise.
- https://ag.ny.gov/sites/default/files/amicus-curiae/massachusetts-v-kalshiex-llc-amicus-brief-2026.pdf Brief of Amici Curiae of Nevada, Ohio, 35 Other States, and the District of Columbia Supporting Appellee, Commonwealth of Massachusetts v. KalshiEx LLC, Massachusetts Supreme Judicial Court No. SJC-13906, Appeals Court No. 2026-P-244. 55 pages, filed 24 April 2026. Downloaded and read direct 20 Aug 2026.
- https://www2.ca3.uscourts.gov/opinarch/251922p.pdf Opinion of the Court, KalshiEX v. Flaherty et al., No. 25-1922, U.S. Court of Appeals for the Third Circuit, decided 6 April 2026. Downloaded and read direct 20 Aug 2026; the quotations on this page are from that reading.
- 7 U.S.C. section 2(e) : the Commodity Exchange Act provision the preemption argument turns on, cited in the brief.
- Whitman v. American Trucking Associations, 531 U.S. 457, 468 (2001) : cited in the brief for the clear-statement rule.