Share
The Casino Association of New Jersey filed an amicus brief to the US Court of Appeals for the Third Circuit in response to prediction markets such as Kalshi operating in the state. Kalshi, which is federally regulated under the Commodity Futures Trading Commission (CFTC), was granted a preliminary injunction in April.
Despite Kalshi being regulated, the New Jersey Division of Gaming Enforcement does not oversee the company, nor any prediction platforms, which the casino association finds troublesome.
CANJ argues against Kalshi
The Casino Association of New Jersey (CANJ) filed an amicus brief to express its opinion about prediction markets, or exchanges, operating in a legal sports betting state without proper jurisdiction. Kalshi has been offering sports contracts, which are essentially sports bets, that can be traded similar to the stock market since the Super Bowl.
A New Jersey judge awarded Kalshi with a preliminary injunction in April because federal law supersedes state law. The CANJ criticized the judge for allowing the injunction, stating in court documents:
“In April 2025, Kalshi convinced the US District Court for the District of New Jersey (Kiel, J.) that, in
fact, federal law makes sports betting legal nationwide and subject exclusively to the CFTC’s jurisdiction. All a sports betting company had to do is follow three easy-peasy steps.“First, register with the CFTC as a designated contract market. Second, notify the CFTC that you intend to allow sports betting on your website. Third, wait 10 business days.
“If the CFTC does not intervene, presto!, the company has free license to offer sports betting nationwide, flout state laws that ban it, and ignore state regulations and taxes that restrict it.”
Circumventing NJ law
The CANJ also wrote that Kalshi board member and former CFTC Commissioner Brian Quintenz has argued that “trading event contracts (including sports event contracts) is illegal outside a CFTC-designated contract market.” Quintenz has been nominated to be the chair of the CFTC.
Allowing Kalshi to continue operating in New Jersey would hinder sports betting in New Jersey, according to the CANJ.
“The injunction below would allow new market entrants to circumvent New Jersey’s established legal framework for regulating sports betting. It would also disadvantage and imperil the entire existing industry that has organized itself to comply with that legal framework.”
The CANJ also pointed out that the CFTC is not a gaming commission and does not have the necessary expertise the New Jersey Casino Control Commission or the DGE has. It continued:
“Kalshi is not trying to swap state gambling regulations for federal gambling regulations, which are nonexistent. Rather, it is here bidding to offer sports betting without answering to any meaningful constraints.”
There have been numerous organizations that have filed amicus briefs against prediction markets. Some of those include the American Gaming Association, hundreds of tribes and 34 other states.
