It depends who you ask, and right now the federal appeals courts are split. Kalshi is a CFTC-registered exchange and says its contracts are federally regulated derivatives that states can't touch. More than a dozen states say its sports contracts are sports betting without a licence. In April 2026 the Third Circuit sided with Kalshi against New Jersey; in August 2026 the Ninth Circuit sided with Nevada against Kalshi. New Jersey has asked the Supreme Court to settle it. Until then, "is it gambling" has a different legal answer depending on your state.
The two arguments
Kalshi's position. Its contracts are event contracts, a kind of swap, listed on a Designated Contract Market under the Commodity Exchange Act. Federal law gives the CFTC exclusive jurisdiction over swaps on a DCM. You trade with other users at prices set by supply and demand; Kalshi takes a fee and never the other side. That's an exchange, not a casino, and states don't get to license exchanges.
The states' position. A Yes contract on "Will the Chiefs win Sunday?" pays off identically to a moneyline bet. States license sports betting, tax it, set the age at 21 and fund problem-gambling programs from it. Calling the bet a "swap" doesn't change what it is, and Congress never intended the CFTC to pre-empt state gambling law. Several tribes add that prediction markets on sports violate the compacts that give them exclusive gaming rights.
Notably, almost nobody is fighting over Kalshi's economics, weather or politics markets. The war is about sports.
What the courts have decided, so far
| Court | Date | Outcome |
|---|---|---|
| Third Circuit (New Jersey) | April 6, 2026 | 2–1 for Kalshi. Upheld the injunction stopping NJ regulators; sports contracts keep trading in NJ. NJ petitioned the Supreme Court on Sept 2, 2026. |
| Ninth Circuit (Nevada) | August 28, 2026 | 3–0 against Kalshi. Held its sports contracts are likely sports gambling under state law, not federally shielded swaps. Kalshi sought rehearing en banc on Sept 9. |
| Fourth Circuit (Maryland) | Argued May 7, 2026 | Undecided. Maryland has paused enforcement pending the ruling. |
| Massachusetts | Injunction Jan 20, 2026; stayed since Feb | State's high court heard the appeal in May; no decision reported. |
| Ohio | March 9, 2026 | Federal judge ruled the products are gambling under state jurisdiction; $5m fine by the Casino Control Commission; appeal to the Sixth Circuit. |
| Michigan | March 2026 | Court-ordered shutdown of sports contracts; Kalshi complied. |
| Arizona | March 2026 onward | State filed 20 misdemeanor charges; a federal judge blocked them; appeals continue. |
| Washington | Summer 2026 | Order covering sports, elections, politics and entertainment markets; Kalshi geofenced. |
Also live: Wisconsin, Rhode Island, Tennessee, Connecticut, Illinois, Utah, Minnesota (a statutory ban passed in May 2026, blocked by a federal judge), tribal suits in California, Baltimore's consumer-protection case, and a federal class action in New York. The CFTC and the Justice Department have sued several states on Kalshi's side.
What it means for you
- If you trade economics, politics, weather or culture markets, nothing has changed anywhere except Washington state.
- If you trade sports, availability depends on your state and the latest order. Kalshi has pulled sports boards in Nevada, Michigan and Washington, and could be ordered to elsewhere. Open positions are handled per Kalshi's notices when a board closes.
- Age is 18 on Kalshi regardless; that's one of the states' complaints.
- Your taxes don't change based on what a state calls it; the IRS treatment is its own question.
Our price
50¢. Not because we're dodging, but because this is the one question on the site where two federal appeals courts have read the same statute and reached opposite answers within five months. The Supreme Court will decide whether to take New Jersey's case after Kalshi's response is filed in November 2026. We'll update this page when it does.
Status as of October 15, 2026, from court dockets and reporting by CBS Sports and OddsShopper. Court outcomes change; check the date at the top.