Between February 17 and May 12, 2026, the federal Commodity Futures Trading Commission (CFTC) filed at least three amicus curiae briefs in major Kalshi cases — each arguing that the CFTC has “exclusive jurisdiction” over sports event contracts and that state gambling laws are federally preempted. The pattern represents the most aggressive federal defense of prediction-market preemption to date, and it directly bears on the federal lawsuit four NM tribes filed against Kalshi on May 12, 2026.
The three briefs
| Date | Court | Case | Key Argument |
|---|---|---|---|
| Feb 17, 2026 | Ninth Circuit | Nadex/Crypto.com v. Nevada gaming regulators | Event contracts on a CFTC-registered DCM fall within the CEA’s “exclusive jurisdiction” |
| Apr 24, 2026 | Massachusetts Supreme Judicial Court | Kalshi-related Massachusetts appeal | Federal preemption applies to all CFTC-regulated prediction markets |
| May 12, 2026 | Sixth Circuit | KalshiEx LLC v. Schuler (Ohio appeal) | State gambling laws cannot prohibit trading on CFTC-registered exchanges |
The legal positions in all three briefs are structurally identical, summarized by WilmerHale’s analysis of the February filing:
“The brief asserts that event contracts are swaps subject to the CFTC’s exclusive jurisdiction under the Commodity Exchange Act (CEA) and that state efforts to regulate or prohibit these contracts as gambling are preempted.”
The CFTC’s structural argument
The CFTC’s threshold position is structural, not contract-specific. Per WilmerHale:
“Congress designed the CEA to occupy the field of exchange-traded commodity derivatives and to displace state-by-state gambling regulation for instruments listed and traded on a CFTC-registered designated contract market (DCM). In the CFTC’s view, the core question for the court is not whether a particular sports-related contract resembles a wager under state law but whether it is a ‘swap’ traded on a DCM.”
Translated: the CFTC argues that once Kalshi lists a contract on its federally registered exchange, state regulators no longer have authority over whether that contract is gambling. Federal law preempts the field.
This argument carries significant weight in court. The CFTC is the agency that administers the Commodity Exchange Act and has decades of jurisdictional precedent supporting field preemption for exchange-traded derivatives. When the same agency files amicus briefs explicitly endorsing a particular defendant’s preemption theory, federal judges typically pay close attention.
Why the CFTC is fighting for Kalshi
The CFTC’s pro-Kalshi position is consistent with the Trump administration’s broader regulatory stance on prediction markets. In April 2026, the federal government sued Connecticut, Arizona, and Illinois in three separate cases, challenging their efforts to regulate prediction-market operators. The CFTC has stated that it has “exclusive jurisdiction” over prediction markets and indicated it will continue to fight state regulatory efforts in court.
The state response: 38 AGs lined up against Kalshi
The state side has organized in parallel. 38 state attorneys general filed coordinated amicus briefs and statements in support of Massachusetts in its Kalshi case, per Bettors Insider. The state coalition argues:
- Sports event contracts are economically indistinguishable from sports wagers
- Federal preemption was never intended to displace state gambling regulation
- The CFTC’s reading of its own jurisdiction is “overly broad”
The Third Circuit’s April 7 ruling siding with Kalshi 2-1 on preemption was a partial federal validation of the CFTC’s reading. But state and federal trial courts have continued to side with state regulators, including in Nevada, Ohio, and Massachusetts.
Why this matters for NM tribes
The CFTC’s preemption argument poses a more difficult problem for the NM tribes than for any single state. NM’s complaint relies on three distinct legal foundations:
- Tribal gaming ordinances (which require 21+ for sports betting vs. Kalshi’s 18+)
- The 2015 Class III tribal-state compact
- The Indian Gaming Regulatory Act (IGRA)
The first two are structurally similar to state gambling regulation and would be reached by the CFTC’s preemption theory. IGRA, however, is federal Indian law — a separate body of law with its own preemption framework rooted in tribal sovereignty. NM tribal lawyers will argue that IGRA is constitutionally distinct from ordinary state gambling regulation and that the CFTC cannot extinguish tribal jurisdiction over gaming on tribal lands.
That argument is essentially untested in the prediction-market context. The Third Circuit’s New Jersey ruling did not address tribal sovereignty. The Ohio decisions did not either. The NM federal court will be the first to address whether the CFTC’s preemption theory extends to tribal gaming jurisdiction under IGRA.
What it means for NM bettors
For NM bettors today: nothing changes. The five legal NM tribal sportsbooks — Santa Ana Star, Isleta + BetMGM, Inn of the Mountain Gods, Buffalo Thunder, and Route 66 — continue to operate retail-only. Online sports betting in NM remains illegal under state and tribal law.
The bigger question is whether the federal government — through the CFTC and the Department of Justice — succeeds in establishing a uniform federal rule that prediction-market platforms can operate nationwide despite state and tribal restrictions. If so, NM and other tribal-exclusive states will face a fundamental policy choice about whether to legalize state-licensed online sports betting on their own terms or accept a federally protected back door.