Federal Judge says Kalshi can continue in New Jersey
A New Jersey federal judge has ruled that state regulators cannot ban the trading platform Kalshi from offering sports prediction markets.
Kalshi has sued New Jersey regulators and asked the court for a preliminary injunction to prevent them from enforcing their recent cease-and-desist order.
New Jersey is one of six states that have issued cease-and-desist letters to Kalshi, and the company is currently involved in legal action in two others: Nevada and Maryland. However, it has made no comment on whether it intends to take similar measures in Ohio, Montana, and Illinois.
The dispute is based on Kalshi’s offering of sports event contracts, which enable people to trade on the outcome of sports events.
Regulators have argued that this is indistinguishable from sports betting, but Kalshi is evading the rules that apply to sportsbook companies. Instead, the Commodity Futures Trading Commission regulates Kalshi.
The issue remains a grey area, but after the decision, the Head of Corporate Development at Kalshi, Sara Slane, said that it was consistent with their contention that the prediction markets in which it operates comply with the law.
Slane said, “We look forward to a swift resolution of these cases and will continue to educate regulators and the public on the benefits of prediction markets and the stringent federal regulations under which we operate.”
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