Feds side with Kalshi
Kalshi has won another key legal battle in its ongoing event betting war against US state gambling regulators after a federal judge sided with the prediction market provider in New Jersey.
US District Judge Edward S. Kiel on Monday granted the New York-based firm a motion for a temporary restraining order and preliminary injunction in its legal conflict with the New Jersey Division of Gaming Enforcement (NJDGE) and the New Jersey Casino Control Commission.
grants Kalshi the right to continue offering sports and politics betting
The NJDGE sent cease-and-desist orders to Kalshi and Robinhood in March but Judge Kiel’s ruling grants Kalshi the right to continue offering sports and politics betting events in New Jersey.
Kiel expressed his opinion that prediction markets fall under the exclusive jurisdiction of the Commodity Futures Trading Commission, while referring to Kalshi’s recent cease-and-desist victory against Nevada.
Furthermore, the feds canceled a roundtable on events contracts scheduled for April 30.
Double blow for regulators
Monday’s ruling comes as a double blow for the NJDGE, with the judge ruling in Kalshi’s favor on two points. The main decision is that Contracts For Difference (CFDs) are beholden to federal and not state law.
unconvinced by the defendant’s arguments”
Kiel wrote: “I am persuaded that Kalshi’s sports-related event contracts fall within the CFTC’s exclusive jurisdiction and am unconvinced by the defendant’s arguments to the contrary.”
The NJDGE also countered that Contracts For Difference (CFDs) should not fall under the jurisdiction of the feds as the markets are not “financial in nature.”
Again Kiel rebutted New Jersey regulators, stating: “Defendants argue that sporting events are without potential financial, economic, or commercial consequence. On the record before me, I disagree.”
The district judge also cited a recent ruling by US Federal Chief Judge Andrew P. Gordon who tossed a similar cease-and-desist order by Nevada regulators against Kalshi earlier this month.
The New York firm could also make it three legal wins in a row, after it filed another anti cease-and-desist lawsuit against Maryland regulators last week.
CFTC cancels meet
News emerging last week that the CFTC canceled its CFDs roundtable will also frustrate regulators, with the federal body reportedly not providing any reason for pulling out “or an update on when, or if, it will be rescheduled.”
The CFTC announced the much sought-after meeting in February. The aim, the feds stated, was to develop “a robust administrative record with studies, data, expert reports, and public input from a wide variety of stakeholder groups to inform the Commission’s approach to regulation and oversight of prediction markets, including sports-related event contracts.”
The federal trade body was expected to harvest information from all parties involved in CFDs before publishing an opinion on the lawfulness of the said contracts.
