Notice: Kalshi is not legal in New Jersey. Kalshi and Robinhood were handed cease-and-desists in New Jersey after taking trades on March Madness.
Kalshi Cease-and-Desist in New Jersey Raises Questions About Legality
Notice: Kalshi is not legal in New Jersey. Both Kalshi and Robinhood received cease-and-desist orders from the New Jersey Division of Consumer Affairs after reportedly accepting trades related to NCAA March Madness events, which are not permitted under state law.
NJ.bet is not affiliated with Kalshi. Any mention of Kalshi in this article is for informational purposes only and does not imply any endorsement or partnership.
What Is Kalshi?
Kalshi is a federally regulated event contract marketplace operating under the approval of the U.S. Commodity Futures Trading Commission (CFTC). Founded in 2018 by MIT graduates Tarek Mansour and Luana Lopes Lara, the platform allows users to trade contracts on outcomes of real-world events—ranging from economic indicators to political developments.
It is positioned as an alternative to informal prediction platforms like Polymarket and PredictIt. Unlike traditional sportsbooks, Kalshi is structured more like a financial exchange, with trades executed through “Yes” or “No” contracts priced between $0.00 and $1.00.
Although Kalshi is federally regulated, it has come under state-level scrutiny. New Jersey regulators intervened after Kalshi allegedly allowed trades on outcomes related to March Madness, an action considered in violation of state law.
How Kalshi Works
Kalshi offers markets tied to real-world events. Users select a market, choose “Yes” or “No” contracts based on their prediction, and receive $1 per contract if correct. If the prediction is incorrect, users forfeit the purchase amount. Kalshi charges a small transaction fee on each trade.
Some of the markets featured include:
- U.S. Federal Reserve interest rate changes
- Election outcomes and polling data
- Weather events such as hurricanes
- Cultural and entertainment events, including award show results
The platform does not support sports betting and does not currently offer a mobile app. All trading is conducted through a mobile-optimized website.
Legality and Regulation
While Kalshi is approved to operate under federal financial law through its CFTC license, state regulators—including those in New Jersey—may restrict its operation within their borders. As of now, Kalshi is not permitted to operate in New Jersey.
This distinction places Kalshi in a unique legal space: it is the first and only federally approved event contract exchange in the U.S., but still subject to individual state regulations. The cease-and-desist orders issued in New Jersey highlight the ongoing tensions between federal permissions and state-level gaming restrictions.
Comparison to Other Platforms
| Feature | Kalshi | Polymarket | PredictIt |
|---|---|---|---|
| U.S. Regulation | ✅ CFTC-approved | ❌ Not regulated | ❌ Limited |
| Market Types | Economics, politics, weather, etc. | Crypto & politics | U.S. politics |
| Deposit Methods | Bank transfers | Crypto only | Credit/PayPal |
| Mobile App | ❌ Not yet | ✅ Available | ✅ Available |
| Audience | U.S. financial market users | Crypto users | Academic/political observers |
Public Perception
Kalshi has received attention in financial and political circles for its unique structure and market offerings. Reviews are generally positive regarding its low fees and usability, but limitations include the lack of a mobile app and restricted access in some states.
Bottom Line:
Kalshi remains a notable development in the evolution of prediction markets in the U.S., but its legal status continues to vary by state. As New Jersey’s recent cease-and-desist order shows, even federally regulated platforms may encounter regulatory challenges at the state level. Users in New Jersey should avoid using Kalshi and consult official state resources for guidance on legal online gambling options in NJ.
