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CFTC Chair Mike Selig Says Third Circuit Upheld Agency Authority Over Contract Markets

A U.S. Third Circuit panel ruled 2-1 that New Jersey cannot block Kalshi’s prediction market contracts, finding that CFTC-regulated designated contract markets fall under exclusive federal jurisdiction.

Summary

A U.S. Court of Appeals for the Third Circuit panel ruled 2-1 that New Jersey cannot prevent Kalshi from offering prediction market contracts. The court held that designated contract markets regulated by the CFTC fall under exclusive federal jurisdiction. The case followed Kalshi’s lawsuit after the company received cease-and-desist orders from New Jersey last year over sports-related contracts. The ruling adds detail to earlier statements from CFTC Chair Mike Selig that the Third Circuit had upheld the agency’s authority over trading on designated contract markets.

Terms & Concepts
  • CFTC: The Commodity Futures Trading Commission, the U.S. regulator overseeing derivatives markets including futures and certain crypto-linked products.
  • Designated contract markets: Trading venues approved and regulated under U.S. commodities law, with oversight that the court said falls under federal authority in this case.
  • Prediction market contracts: Contracts that let participants trade on the outcome of future events, such as sports or political developments, within a regulated market structure.