The appeals court affirmed Utah’s ability to enforce its gambling laws against Kalshi’s sports-event contracts, adding another federal appellate loss for the platform as New Jersey asks the Supreme Court to settle the growing conflict over whether prediction markets are federally regulated swaps or state-regulated sports betting.
Kalshi has lost again in its fight to keep state gambling regulators away from its sports prediction markets.
The United States Court of Appeals for the Tenth Circuit sided Tuesday with Utah, upholding the state’s position that it may enforce its gambling laws against Kalshi’s sports-event contracts. The decision affirms the earlier Utah ruling and gives the prediction markets industry another unfavorable appellate result at a moment when the courts are moving toward an increasingly unworkable state-by-state patchwork.
BREAKING: Tenth Circuit denies Kalshi’s emergency motion for injunction pending appeal, which aimed to prevent Utah state officials from taking civil or criminal action against Kalshi during the appeal process. Utah can now enforce its strict anti-gambling laws against Kalshi. pic.twitter.com/8OG0oxjK17
— Daniel Wallach (@WALLACHLEGAL) September 8, 2026
It is the second federal appeals court, along with the Sixth Circuit, to reject the idea that Commodity Futures Trading Commission registration automatically gives a platform the right to offer sports contracts nationwide. The ruling also contributes to the split with the Third Circuit, which ruled with Kalshi in a case against New Jersey.
The original Utah ruling
Utah was an early test of Kalshi’s federal preemption argument.
Kalshi has argued that its event contracts trade on a CFTC-regulated designated contract market, bringing them within the Commodity Exchange Act’s exclusive federal framework. Under that theory, states cannot classify the same contracts as illegal sports betting and enforce their own gambling laws against the platform.
Utah disagreed. State officials argued that a contract tied to a football game, a player outcome, or another sporting event is gambling in substance, regardless of whether it is offered through a federally registered exchange.
The district court agreed with Utah’s basic position, declining to block the state from applying its anti-gambling laws to Kalshi’s sports products. The court rejected the company’s attempt to treat federal commodities regulation as a complete shield from state enforcement.
That ruling mattered because Utah is one of the country’s most restrictive gambling states. It has no commercial casinos or legal sports betting, and its government has historically taken an aggressive view of activities that look like gambling.
The case therefore put Kalshi’s nationwide model in direct conflict with a state that has little interest in accommodating a federally structured alternative to the traditional sportsbook system.
A growing appellate divide
Courts are not producing one nationwide answer.
The Third Circuit gave Kalshi its most important win earlier this year in the company’s dispute with New Jersey. That court concluded, at the preliminary injunction stage, that Kalshi was likely correct that its sports-event contracts qualify as swaps under the Commodity Exchange Act.
It blocked New Jersey from enforcing its gambling laws against Kalshi while the underlying case proceeds.
The Ninth Circuit then came to the opposite conclusion in Nevada. Its ruling found that Kalshi’s sports contracts were not federally protected swaps as the company claimed and allowed Nevada to apply its gaming laws.
Now the Tenth Circuit has aligned with Utah, giving states another appellate decision they can cite when arguing that the Commodity Exchange Act does not wipe away their longstanding authority to regulate gambling.
The Sixth Circuit remains another unresolved front. It is considering cases tied to Michigan’s enforcement campaign against Kalshi and related platforms, including Robinhood, Polymarket and Coinbase. Michigan has already secured a state-court preliminary injunction requiring Kalshi to geofence sports contracts, with potential penalties of up to $500,000 per day for violations.
New Jersey wants the Supreme Court
New Jersey has already asked the United States Supreme Court to intervene.
On Sept. 2, the state petitioned the justices to review the Third Circuit’s decision and decide whether state gambling laws are preempted when a federally regulated exchange lists contracts tied to sporting events. The petition frames the dispute as a national question with direct consequences for consumer protection, sportsbook licensing, state tax systems and tribal gaming interests.
The Ninth Circuit’s Nevada decision gave New Jersey an obvious circuit split to point to. The Tenth Circuit’s Utah result adds to the practical pressure for review, even if the legal and procedural facts of each case are not identical.
The Supreme Court does not have to accept the petition. It could decline review, let more appellate litigation unfold, or wait for the Sixth Circuit and other courts to weigh in. But every additional ruling that moves in a different direction makes the status quo harder to defend.
