Better Markets urges Second Circuit to preserve New York’s power over Kalshi sports contracts

Better Markets has asked the U.S. Court of Appeals for the Second Circuit to uphold a lower-court ruling that New York may enforce its gambling laws against KalshiEX’s sports-event contracts. The Nov. 6 amicus brief, filed in KalshiEX LLC v. Williams, No. 26-1835, supports New York officials and asks the court to reject Kalshi’s appeal on the merits.

The nonprofit argues that the contracts are sports bets rather than swaps subject to the Commodity Futures Trading Commission’s exclusive jurisdiction. It says the Commodity Exchange Act expressly bars gaming contracts from being listed on derivatives markets, and that Congress did not intend federal commodities law to displace state gaming regulation.

Better Markets said allowing federal preemption would expose millions of Americans to sports-betting harms, threaten election integrity and damage derivatives markets. Its legal director, Dominick Freda, said: “Kalshi’s sports bets are what they look like: gambling, pure and simple.”

The filing came after the Second Circuit denied Kalshi’s request for an injunction pending appeal, as we reported on Nov. 3. That left the lower court’s refusal to block New York enforcement in place while the merits appeal proceeds; Better Markets’ brief says the Southern District of New York recognized the state’s authority to regulate Kalshi in the same way as other online sportsbooks.

The group pointed to recent Sixth and Ninth Circuit decisions requiring Kalshi to comply with state gambling laws. It also noted that none of the Ninth Circuit’s 29 judges voted to reconsider that court’s Kalshi decision.

New York’s dispute with Kalshi followed an October 2025 cease-and-desist letter from the New York State Gaming Commission. The commission alleged that offering sports-related event contracts in the state without a sports-gaming licence violated New York law.

The CFTC takes the opposite position. In a separate lawsuit filed with the United States on April 24, the agency sought a declaration that it has exclusive authority over event contracts and an injunction preventing New York from enforcing state laws that federal law preempts. CFTC Chairman Michael S. Selig said state lawsuits were seeking to limit access to event contracts and undermine the agency’s “sole regulatory jurisdiction.”

The agency defines event contracts as derivatives allowing parties to trade on whether a future event will occur. As of April 24, at least eight CFTC-regulated designated contract markets had self-certified more than 3,000 such contracts with the agency, underscoring the scale of the jurisdictional dispute now before courts in several states.