Second Circuit to hear CFTC at Kalshi, Conn. oral arguments
The U.S. Court of Appeals for the Second Circuit agreed Friday to let the Commodity Futures Trading Commission participate in oral arguments covering a dispute between Kalshi and the state of Connecticut. The court did not set a date for the arguments. Connecticut is challenging Kalshi's sports event contracts. Meanwhile, attorney Daniel Wallach identified five separate prediction-market appeals pending before the Seventh Circuit. The Seventh Circuit docket covers disputes involving the CFTC, Kalshi, Coinbase, and the Ho-Nation.
The Second Circuit's invitation gives the CFTC another courtroom to press its argument that federal registration shields event contracts from state gambling laws. The commission is already locked in a parallel preemption fight against Utah alongside the DOJ, and it faces a Sixth Circuit pattern that stripped Kalshi's shield in Ohio and Tennessee. Each circuit that weighs in deepens the split the Supreme Court would resolve.
The CFTC's swap-rule proposal offers a regulatory path, but rulemaking trails court schedules by months. A coherent judicial win in the Second Circuit would strengthen the commission's brief if the justices grant cert. For Kalshi, every favorable federal circuit delays the state-by-state erosion that Utah, Louisiana, and other attorneys general are now copying.
Joins the CFTC's Utah preemption suit and its existing Sixth Circuit losses as part of the widening circuit-level fight over whether federally registered prediction markets can block state gambling enforcement.