A federal judge in Arizona has temporarily barred state officials from enforcing gambling laws against Kalshi, siding with US regulators. The ruling halts state-level action targeting contracts listed on CFTC-regulated markets.
Judge Michael Liburdi granted a request from the Commodity Futures Trading Commission (CFTC) and the federal government. The core issue is whether Kalshi’s “event contracts” fall under federal derivatives law or state gambling statutes. Arizona authorities had sought to pursue enforcement under local gambling rules.
The court indicated the CFTC is likely to succeed in arguing these contracts qualify as “swaps” under the Commodity Exchange Act, placing them within federal jurisdiction. This law grants the CFTC exclusive authority over swaps traded on designated contract markets.
Arizona officials are now temporarily prohibited from initiating or continuing enforcement actions tied to Kalshi’s event contracts on regulated exchanges. The restraining order remains in effect until April 24, while the court considers a longer-term injunction.
This case adds to a broader debate over prediction markets in the United States, as regulators and states clash over whether these products resemble financial instruments or online betting. Utah lawmakers recently passed a bill classifying proposition-style bets on in-game events as gambling.
Separately, a Nevada judge extended a ban preventing Kalshi from offering event-based contracts in that state, arguing the products amount to unlicensed gambling.