Kalshi Granted Temporary Injunction in new Jersey Sports Trading Case
Prediction market operators got more great news this week as Kalshi won a preliminary restraining order and a momentary injunction against the New Jersey Division of Gaming Enforcement (NJDGE). Last month, the NJDGE issued cease-and-desist orders to Kalshi and Robinhood, another prediction market company.
Key Insights:
- New Jersey is one of a number of states that issued cease-and-desist orders to Kalshi and/or other forecast market providers over their just recently provided sports event futures contracts.
- This is the second federal court, after the U.S. District Court for the District of Nevada, that has actually agreed Kalshi.
- Should forecast markets preserve their asserted right to use sporting occasion agreements, without state guideline or tax, it might adversely affect state sports betting incomes.
After getting a cease-and-desist order from the NJDGE, Kalshi filed a movement for a preliminary restraining order and a momentary injunction with the U.S District Court for the District of New Jersey. In response, the NJDGE submitted an opposition to Kalshi's movement.
The NJDGE argues that Kalshi made its sporting occasion agreements available to New Jersey residents in violation of New Jersey sports wagering laws and guidelines. Kalshi is unlicensed by the state. As a forecast market operator, nevertheless, it is federally managed by the Commodity Futures Trading Commission (CFTC).
Kalshi argues that the state has no jurisdiction over its sporting event agreements as prediction markets are regulated by the federal government. The NJDGE countered that sporting event contracts must not fall under the CFTC's jurisdiction as they are not monetary in nature. The vast bulk of regulated futures agreements are based on the future prices of commodities or other monetary securities.
On both points, the judge sided with Kalshi.
Prediction market operators got more great news this week as Kalshi won a preliminary restraining order and a momentary injunction against the New Jersey Division of Gaming Enforcement (NJDGE). Last month, the NJDGE issued cease-and-desist orders to Kalshi and Robinhood, another prediction market company.
Key Insights:
- New Jersey is one of a number of states that issued cease-and-desist orders to Kalshi and/or other forecast market providers over their just recently provided sports event futures contracts.
- This is the second federal court, after the U.S. District Court for the District of Nevada, that has actually agreed Kalshi.
- Should forecast markets preserve their asserted right to use sporting occasion agreements, without state guideline or tax, it might adversely affect state sports betting incomes.
After getting a cease-and-desist order from the NJDGE, Kalshi filed a movement for a preliminary restraining order and a momentary injunction with the U.S District Court for the District of New Jersey. In response, the NJDGE submitted an opposition to Kalshi's movement.
The NJDGE argues that Kalshi made its sporting occasion agreements available to New Jersey residents in violation of New Jersey sports wagering laws and guidelines. Kalshi is unlicensed by the state. As a forecast market operator, nevertheless, it is federally managed by the Commodity Futures Trading Commission (CFTC).
Kalshi argues that the state has no jurisdiction over its sporting event agreements as prediction markets are regulated by the federal government. The NJDGE countered that sporting event contracts must not fall under the CFTC's jurisdiction as they are not monetary in nature. The vast bulk of regulated futures agreements are based on the future prices of commodities or other monetary securities.
On both points, the judge sided with Kalshi.