Gaming attorneys blast CFTC for directing Kalshi to defy favorable court orders
Two gaming attorneys criticized the Commodity Futures Trading Commission (CFTC) on an Indian Gaming Association webcast for directing Kalshi to defy court orders that ruled in the platform's favor. The attorneys called the CFTC's actions contemptuous and a departure from standard practice. Separately, a former Ripple chief technology officer publicly challenged Kalshi's legal argument that federal commodity regulations preempt state gaming law.
The legal front against Kalshi's federal preemption defense is now a three-way pressure matrix. State attorneys general in Connecticut, New York, and Wisconsin are suing to block sports event contracts. Federal appellate courts are treating CFTC registration as no shield. Now the CFTC itself is directing Kalshi to defy court orders that ruled in its favor. Kalshi's traders hold positions whose validity depends on which court or regulator won the day, not on any uniform standard. Rivals Polymarket and Novig face identical exposure.
Each new ruling shrinks the territory where a single federal license protects contract validity. The first platform to lose a second federal appeal risks a domino effect that fragments the national sports market. Geofencing costs compound while the Second Circuit timeline stretches across months. Kalshi built a national model on one federal designation. That foundation is eroding state by state and ruling by ruling. The Ninth Circuit rules Kalshi sports contracts are gambling, not swaps.