Four states now have court orders stopping Kalshi-style sports event contracts outright, and two federal appeals courts have ruled against each other on whether states can do that at all. The Third Circuit sided with Kalshi in New Jersey on April 6, 2026. The Ninth Circuit sided with Nevada on August 28, 2026. New Jersey’s attorney general has since asked the Supreme Court to settle which one is right.
Where a bettor can actually trade sports event contracts right now depends entirely on which state they’re in and which court ruled most recently. Roughly a dozen states are suing Kalshi, being sued by Kalshi, or have sent cease-and-desist letters that are still working through the courts. Most states have taken no action at all.
Sports event contracts are blocked by court order in Nevada, Massachusetts, Michigan and Washington. Ohio is effectively added to that list after the Sixth Circuit ruled against Kalshi on September 25, 2026, and the state followed up with ten more cease-and-desist letters on October 2.
Contracts remain live for now in New Jersey, Tennessee, Connecticut, Missouri, Arizona, Montana, Illinois, Minnesota, Rhode Island, Utah, Wisconsin and Kentucky, even though each of those states has an active lawsuit or cease-and-desist order in play.
Maryland sits in between: a federal judge has already ruled against Kalshi there, and the case is awaiting a decision from the Fourth Circuit. Outside this group of roughly a dozen contested states, sports contracts operate without legal challenge in the remaining states, under Kalshi’s federal license.
Kalshi’s legal position starts with the Commodity Futures Trading Commission license it received in November 2020, which designates it a contract market under federal law. Kalshi argues its sports event contracts are swaps regulated by that federal license, and that the Commodity Exchange Act preempts any state gambling law that tries to stop them.
States counter that a contract paying out on which team wins a game is sports betting with extra steps, licensed or not, and that federal commodities law was never meant to cover it.
Two circuit courts have now ruled on opposite sides of that question. The Third Circuit ruled 2-1 for Kalshi in New Jersey on April 6, 2026, finding federal law preempts the state’s enforcement. The Ninth Circuit ruled 3-0 against Kalshi in Nevada on August 28, 2026, finding the contracts are not swaps and that the Commodity Exchange Act does not preempt Nevada’s gambling law. The Sixth Circuit then agreed with the Ninth Circuit’s reasoning on September 25, 2026, in cases involving Ohio and Tennessee.
Nevada moved first and fastest. Carson City District Court Judge Jason Woodbury issued a temporary ban on March 20, 2026, a preliminary injunction followed on April 28, and the Ninth Circuit made it permanent on August 28 by ruling unanimously that Kalshi’s contracts are not swaps. Nevada Gaming Control Board Chair Mike Dreitzer said the ruling "completely vindicates what we have been saying all along: This is sports betting."
Massachusetts sued Kalshi in September 2025, and a Superior Court judge called Kalshi’s swap argument "overly broad" before issuing an injunction that took effect March 8, 2026. Sports contracts are blocked there, though some non-sports Kalshi markets may still be reachable.
Michigan’s courts ordered a pause on sports-contract operations, which Kalshi is complying with while arguing the dispute belongs in federal court. Polymarket US went further, announcing on October 29, 2026 that it was halting sports contracts in Michigan entirely. Washington followed in mid-August 2026 with an order blocking sports, election and mention markets, making it the fourth state to shut Kalshi down alongside Michigan, Nevada and Massachusetts.
Ohio’s Casino Control Commission had already accused Kalshi of offering unlicensed sports gaming, including to people under 21, before the Sixth Circuit’s September 25 ruling against Kalshi gave the state’s position legal backing. Ohio responded by sending ten more cease-and-desist letters to other prediction-market operators on October 2, 2026.
New Jersey is where Kalshi has won the most so far. After a March 2025 cease-and-desist letter and an April 2025 district court injunction, the Third Circuit ruled for Kalshi on April 6, 2026. Tennessee went the opposite direction: a federal court initially sided with Kalshi on February 19, 2026, but the Sixth Circuit reversed that injunction on September 25, and Kalshi has filed a petition asking the full court to rehear the case. Tennessee’s Sports Wagering Council sent a second round of cease-and-desist letters, adding PrizePicks and Underdog, on October 9, 2026.
Connecticut ordered Kalshi to stop in December 2025; Kalshi sued the state, and the CFTC separately sued Connecticut making the same preemption argument. Missouri’s attorney general issued cease-and-desist notices to six platforms including Kalshi in mid-September 2026, and Kalshi sued Missouri in late October, becoming the third operator to sue the state rather than comply. Arizona sent cease-and-desist letters in May 2025, a judge denied Kalshi’s injunction request in April 2026, and Arizona asked the Ninth Circuit in September to clear the way for criminal gambling charges.
Montana’s Gambling Control Division was the first regulator in the country to send Kalshi a cease-and-desist letter, back on March 26, 2025, and sent a second one on April 6, 2026. Kalshi sued Montana’s attorney general in response, and by mid-August 2026 sports contracts were reported unavailable to Montana users even as other markets stayed live. Illinois sent Polymarket a cease-and-desist order in January 2026 over a new state licensing law, but a federal court partially blocked that law on October 2, 2026, after Kalshi and Coinbase sued.
Minnesota passed a law in May 2026 making prediction-market operation a felony, but a federal judge blocked it before it could take effect, and the CFTC sued separately to stop it; Kalshi and Polymarket keep serving Minnesota users while the state appeals. Rhode Island’s attorney general sued Kalshi and Polymarket in May 2026, and the CFTC countersued the state days later. Utah’s federal court denied Kalshi an injunction in August 2026, clearing the state to enforce its law while Kalshi appeals, though platforms remain reachable in the meantime. Wisconsin faces a combined lawsuit from its attorney general and the Ho-Chunk Nation over tribal-gaming law, now pending at the Seventh Circuit, and Kentucky combines its own lawsuit with a 14.25% state tax on prediction-market trades that both the CFTC and an industry coalition are fighting. The CFTC itself has sued nine states over their authority to regulate prediction markets: Arizona, Connecticut, Illinois, New York, New Mexico, Minnesota, Rhode Island, Wisconsin and Kentucky.
Maryland’s Lottery and Gaming Control Commission sent its cease-and-desist letter on April 7, 2025, demanding Kalshi stop offering sports-outcome contracts. Kalshi asked a federal judge to block the state from enforcing it and lost.
That judge found no clear distinction between Kalshi’s sports event contracts and ordinary sports betting, a conclusion closer to the Ninth Circuit’s later reasoning than the Third Circuit’s. Kalshi has appealed to the Fourth Circuit, with oral arguments held May 7, 2026.
The state’s brief in that appeal is due December 15, 2026, and a ruling is still pending. Maryland is currently the clearest example of a court siding against Kalshi’s federal preemption argument outside the Ninth and Sixth Circuits.
New Jersey Attorney General Jennifer Davenport filed a petition in September 2026 asking the U.S. Supreme Court to resolve the split between the Third and Ninth Circuits, warning that Kalshi’s model "would upend the promise that each state could decide whether to allow sports wagering within its borders." New Jersey’s own filing noted that sports contracts made up 95% of Kalshi’s revenue last year.
Robinhood and, reportedly, Crypto.com filed their own petitions with the Supreme Court between September 2 and 11, 2026, following the same circuit split.
A Supreme Court ruling would reach far beyond New Jersey. Every pending case in Connecticut, Missouri, Arizona, Montana, Illinois, Minnesota, Rhode Island, Utah, Wisconsin, Kentucky and Maryland turns on the same question: does a CFTC license preempt state gambling law for sports event contracts. A single decision could resolve all of them at once, in either direction.
Outside the roughly dozen contested states, sports event contracts are simply available. Kalshi operates under its November 2020 CFTC designation with no cease-and-desist letter and no lawsuit in states such as Idaho, Mississippi and Vermont.
That amounts to something close to 40 states with no legal action on record against prediction-market sports contracts, where the platforms operate nationally on the strength of Kalshi’s federal license alone.
None of this is fixed. A single state regulator can send a cease-and-desist letter, or a circuit court can rule, and a state can move from open to blocked within weeks, as Washington and Ohio both did in 2026. Anyone checking whether their state is currently live should look at the geoblocking on the platform itself rather than assume last month’s status still holds.