U.S. Court of Appeals for the Third Circuit
Third Circuit opinion in Kalshi v. New Jersey
No. 25-1922
Entered
Court opinionInjunction affirmed, 2–1
Cite this page
Bluebook
Third Circuit Kalshi Ruling (April 6, 2026): What the Court Held in Kalshi v. New Jersey, Prediction Market Laws (last updated Nov. 7, 2026), https://predictionmarketlaws.com/documents/third-circuit-kalshi-v-flaherty-opinion.
APA
Prediction Market Laws. (2026, November 7). Third Circuit Kalshi Ruling (April 6, 2026): What the Court Held in Kalshi v. New Jersey. https://predictionmarketlaws.com/documents/third-circuit-kalshi-v-flaherty-opinion
A divided Third Circuit panel upheld the order that bars New Jersey from enforcing its sports-wagering laws against Kalshi. The majority held that Kalshi's sports event contracts are swaps, that the Commodity Futures Trading Commission has exclusive jurisdiction over swaps traded on a federally designated contract market, and that federal law therefore preempts New Jersey's effort to regulate them. It was the first federal appeals court ruling on whether a state can regulate sports event contracts.
What the court held
- Swaps. Kalshi's sports contracts are “swaps” under the Commodity Exchange Act because their outcomes are associated with potential economic consequences. The court rejected New Jersey's narrower reading of the definition.
- Exclusive jurisdiction. Because the contracts trade on a CFTC-designated contract market, the CFTC's jurisdiction over them is exclusive.
- Field preemption. The preempted field is trading on designated contract markets, a form of futures trading, not gambling in general.
- Conflict preemption. Enforcing New Jersey law against these contracts would obstruct the Act's purpose of replacing a patchwork of state rules.
- Savings clauses. Neither of the Act's savings clauses preserves state enforcement against trading on a designated contract market.
- The other factors. Kalshi faced irreparable harm from threatened civil and criminal penalties and lost business, and the public interest favored enforcing the federal statute.
“The Act preempts state laws that directly interfere with swaps traded on DCMs.”
The dissent
Judge Roth would have applied a strong presumption against preemption because states have long regulated gambling. She read the savings clauses as leaving room for state law and concluded that Kalshi could comply with both federal and state rules.
Why it matters
This is the decision Kalshi relies on most. The Ninth and Sixth Circuits later reached the opposite result, and New Jersey has asked the Supreme Court to review this one (No. 26-299).
Where it fits in the case
Kalshi v. New Jersey (Third Circuit)U.S. Court of Appeals for the Third Circuit, 25-1922
- Appeal docketed.
- Oral argument.
- Panel affirms the preliminary injunction, 2-1 (Porter, J.; Roth, J., dissenting). This opinion
- New Jersey petitions for certiorari (No. 26-299).
Read and cite it
Cite the opinion
KalshiEX, LLC v. Flaherty, No. 25-1922 (3d Cir. Apr. 6, 2026).
Cite this summary
Prediction Market Laws, Third Circuit opinion in Kalshi v. New Jersey (read Nov. 7, 2026), https://predictionmarketlaws.com/documents/third-circuit-kalshi-v-flaherty-opinion.