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Can states ban Kalshi election markets? There is no single nationwide answer established by the cases and agency actions described here. The dispute is whether federal derivatives law shields event contracts traded on a federally registered market from state gambling rules, or whether states can still enforce their own laws. The CFTC argues for federal authority; state officials have challenged Kalshi under state law. The cases remain at different stages, and a Ninth Circuit ruling about Kalshi sports contracts did not decide the legality of its election contracts.
Why are states challenging Kalshi?
Kalshi offers event contracts whose value depends on real-world outcomes, including elections. The central legal question is one of jurisdiction and classification: are these contracts derivatives covered by federal law, or do particular offerings count as gambling or election wagering subject to state restrictions?
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The CFTC says Congress gave it exclusive jurisdiction over covered derivatives traded on designated contract markets. State officials argue that some Kalshi offerings violate state gambling laws. Those are competing legal positions, not a settled nationwide rule. The CFTC described its position in its Wisconsin lawsuit announcement of April 28, 2026.
What is Arizona alleging about election wagering?
On March 17, 2026, Arizona Attorney General Kris Mayes announced a 20-count criminal information against KalshiEx LLC and Kalshi Trading LLC. The state alleged unlicensed gambling and election wagering. Four of the announced counts concerned election contracts: the 2028 presidential race, the 2026 Arizona gubernatorial race, the 2026 Republican gubernatorial primary, and the 2026 Secretary of State race. These are allegations in the Attorney General’s announcement, not proof of guilt or a report of a conviction or later disposition.
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Mayes said, “No company gets to decide for itself which laws to follow.” The state’s allegations and quote appear in the Arizona Attorney General’s announcement.
What have the CFTC and states done in court?
The CFTC has brought federal cases seeking to stop state enforcement that it considers preempted by federal law. States, in turn, have pursued actions against prediction-market operators. The disputes below involve different states and procedural steps; neither CFTC announcement establishes a final judgment resolving the issue for every state or contract type.
| Date and forum | What happened | What it establishes |
|---|---|---|
| April 28, 2026 — Wisconsin | The CFTC said Wisconsin had filed civil suits against Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase, asserting felony violations of state law. The CFTC then sued Wisconsin, asserting that federal law gives it exclusive jurisdiction over covered derivatives, including event contracts traded on designated contract markets. | The CFTC’s jurisdictional position and the existence of competing litigation—not a final ruling accepting that position for all contracts. See the CFTC’s Wisconsin announcement. |
| June 12, 2026 — New Mexico | The CFTC said New Mexico had sued Kalshi in state court the prior week, alleging unlawful online sports betting. The CFTC filed a federal case seeking declaratory relief and an injunction against enforcement it views as preempted. | The federal-state conflict had extended to another state and to allegations about sports betting. The CFTC also listed litigation involving Arizona, Connecticut, Illinois, New York, Minnesota, Rhode Island, and Wisconsin as of that announcement; that list is not a guarantee of the current or complete docket. See the CFTC’s New Mexico announcement. |
CFTC Chairman Michael S. Selig said, “States cannot circumvent the clear directive of Congress.” That is the agency’s view of federal authority, not a judicial resolution of the states’ challenges.
Did the Ninth Circuit decide whether Kalshi election contracts are legal?
No. In KalshiEX, LLC v. Assad, No. 25-7516, the Ninth Circuit’s August 28, 2026 decision concerned Kalshi’s sports-related event contracts in its dispute with Nevada. The court affirmed in part the dissolution of a preliminary injunction that had protected Kalshi from Nevada gaming regulation. It concluded Kalshi had not shown a likelihood that the Commodity Exchange Act preempts Nevada gaming rules as applied to those sports contracts.
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The court remanded for further consideration of Nevada’s challenges to the election contracts. That is an election-contract remand, not an appellate decision on their legality. The ruling was interlocutory, and it does not itself establish the law nationwide. Read the Ninth Circuit opinion.
How does the earlier CFTC order fit into the current dispute?
The current state and federal cases are separate from the CFTC’s earlier action over Kalshi’s congressional-control contracts. The CFTC issued an order barring certain such contracts in 2023. A federal district court granted summary judgment to Kalshi and vacated that order in September 2024; the CFTC dismissed its appeal on its own motion in May 2025. That history concerns those contracts and that order, not a final ruling on every election market or state law.
The CFTC is also conducting a separate rulemaking process. It withdrew a 2024 proposed event-contract rule in February 2026, published an advance notice of proposed rulemaking on prediction markets in March 2026, and closed the comment period on April 30, 2026. The Federal Register reported approximately 3,500 submissions, of which approximately 300 included detailed comments and recommendations. Those counts describe submissions to the CFTC process, not public opinion or trading activity.
In its 2026 account of the earlier order, the Federal Register recounted the CFTC’s concerns that political contracts could affect election integrity or perceptions of integrity, could be manipulated, or could incentivize misinformation. The agency said such contracts “could potentially be used in ways that would have an adverse effect on the integrity of elections, or the perception of integrity of elections.” These are concerns and findings attributed to the Commission’s earlier order, not established effects. The history and rulemaking status are set out in the Federal Register notice, “Prediction Markets; Public Interest Determinations”.
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What is the legal status of Kalshi election markets now?
The cited developments do not establish the ultimate result of Arizona’s case, the outcome of Nevada’s election-contract remand, the final disposition of every state or federal lawsuit, or a final CFTC rule. The answer therefore depends on the contract and the case: a state allegation, an agency’s preemption argument, and an appellate ruling about sports contracts are not interchangeable legal outcomes. Neither a categorical state power to ban every Kalshi election market nor blanket federal immunity is established by these developments.
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