Kalshi v. New Jersey
IN THE
FOR THE THIRD CIRCUIT
United States Court of Appeals
On Appeal from 1:25-cv-02152
Case Summary
KalshiEX LLC filed suit in the District of New Jersey (No. 1:25‑cv‑02152) after New Jersey issued a cease‑and‑desist letter claiming Kalshi’s federally regulated sports‑event contracts violated the state constitution and gambling laws. The district court granted Kalshi a preliminary injunction, holding that Kalshi was likely to succeed because the Commodity Exchange Act gives the CFTC exclusive jurisdiction over swaps and event contracts traded on a designated contract market, leaving no room for state gambling enforcement. The court also found irreparable harm and that the equities favored injunctive relief.
New Jersey appealed, creating Third Circuit case No. 25‑1922. On April 6, 2026, the Third Circuit affirmed the injunction, agreeing that both field preemption and conflict preemption bar New Jersey from enforcing its gambling laws against Kalshi’s CFTC‑regulated contracts. The appellate mandate has issued, and the case is fully resolved at the appellate level, with the injunction remaining in place.
After losing in the Third Circuit, New Jersey filed a petition for writ of certiorari in the U.S. Supreme Court (26-299, docketed and pending). In parallel, two Ninth Circuit matters arising out of Nevada federal litigation—Crypto.com (No. 26‑344) and Robinhood (No. 26‑338)—have also been appealed to the Supreme Court and docketed. Because the Third Circuit and Ninth Circuit proceedings collectively present conflicting approaches to the scope of the CEA and federal jurisdiction over event‑contract markets, we believe the Supreme Court is likely to grant review to resolve the emerging split. The Third Circuit’s injunction remains in effect while these certiorari petitions are pending.
Lexicon Labs Amicus Brief
June 23, 2025
Our Position
This is a case of agency inaction, not preemption. The Commodity Exchange Act preempts the field and sports is an excluded commodity, so the CFTC has sole decision-making powers over event contracts on sports outcomes.
The law is unambiguous: There can be no sports gambling on a CFTC-regulated exchange, and, as inconvenient as it may sound, none at all in any state, on any platform. If residents of New Jersey–or any other state–wish to legalize sports gambling, the appropriate course is through Congress.
The CFTC, however, chose inaction. Fortunately, both Congress and the Supreme Court have anticipated the risks posed by regulatory vacuums and implemented meaningful safeguards, through the Administrative Procedure Act (“APA”), and through Loper Bright, both of which have limited agency overreach. Together, these safeguards provide a strong legal foundation for this Court to reverse the preliminary injunction, ensuring that this critically important case can proceed on the merits.