Kalshi has won a significant legal battle as the U.S. Court of Appeals for the Third Circuit upheld a preliminary injunction preventing New Jersey from enforcing state gambling laws against the company's sports-related event contracts. The court ruled that Kalshi demonstrated a reasonable likelihood of success in arguing that the Commodity Exchange Act preempts New Jersey's efforts to shut down these markets. This decision maintains an earlier district court order from April 2025, which barred the state from proceeding with enforcement while the case is ongoing. The case originated when New Jersey issued a cease and desist letter to Kalshi in 2025, claiming the company's contracts constituted unauthorized sports wagering under state law. Kalshi contended that its products are federally regulated derivatives traded on a CFTC-licensed market, not traditional sports bets. The Third Circuit agreed, noting that Kalshi's contracts likely fall under the Commodity Exchange Act's definition of swaps, thus falling within the CFTC's exclusive jurisdiction. The ruling is significant as it represents Kalshi's most decisive appellate victory in the ongoing national debate over prediction markets, despite mixed outcomes in other states.