Kalshi, the website that allows people to bet on pretty much anything, is engaged in a high-profile marketing and public affairs campaign to insist why it is *not* a gambling or betting site. One reason may be to avoid the stigma that surrounds gambling and the predatory nature of the industry. But another reason is that Kalshi, and similar companies, do not want to be subject to state gambling and consumer protection laws. Rather, they allege they are actually commodities exchanges subject to the exclusive jurisdiction of the CFTC–an agency which, given the current administration, is unlikely to take any action to protect consumers.
Today, a divided Third Circuit panel bought that argument, affirming a grant of a preliminary injunction against the State of New Jersey on the grounds that the New Jersey constitution and gambling laws that prohibit betting on collegiate sports is preempted by the Commodity Exchange Act. In dissent, Judge Roth described “Kalshi’s actions as a performative sleight meant to obscure the reality that Kalshi’s products are sports gambling,” and would find New Jersey’s laws subject to neither field preemption or conflict preemption. As she put it, “Basic abductive reasoning tells us that if it looks like gambling, talks like gambling, and calls itself gambling, it’s gambling.”
