The Kalshi sports betting case is gaining traction as more states enter the legal debate. Over 30 jurisdictions have now backed Massachusetts in court. The dispute centres on whether federal law can override state gambling rules.

• A group of 36 states and Washington DC has filed an amicus brief supporting Massachusetts. They argue gambling regulation, including sports betting, has long been handled at state level. The filing warns that shifting authority would disrupt existing oversight structures.
• The case focuses on Kalshi’s event contracts, which let users trade on outcomes like sports results. These contracts mirror betting, with payouts tied to predictions. Kalshi has promoted the model as available nationwide regardless of state laws.
• States say Kalshi’s argument relies on a broad reading of “swaps” under federal derivatives law. They argue Congress did not clearly intend to legalise sports betting through financial legislation. The brief stresses that major regulatory changes usually require explicit wording.
• Courts in Nevada and Ohio have already pushed back on Kalshi’s position. Judges questioned whether sports contracts fit within the legal definition of swaps. They also highlighted the risk of undermining the balance between state and federal regulation.
• The Kalshi sports betting case also raises questions about the role of the CFTC (Commodity Futures Trading Commission). The regulator has recently signalled that event contracts could fall under its remit, despite earlier caution. States argue federal oversight would not address gambling-specific risks covered by local rules.

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