Better Markets has filed an amicus brief urging the U.S. Court of Appeals for the Second Circuit to reject KalshiEX LLC’s appeal and uphold New York’s enforcement of its gambling laws against the company’s sports-event contracts.
The consumer and financial-markets advocacy group filed in KalshiEX LLC v. Williams, docket No. 26-1835, supporting the defendants-appellees and affirmance of the Southern District of New York’s decision. Better Markets announced the filing Nov. 9, while its brief is dated Nov. 6.
Its central argument is that Kalshi’s sports contracts are gambling rather than swaps. “Kalshi’s sports bets are what they look like: gambling, pure and simple,” Dominick Freda of Better Markets said in announcing the submission.
The brief argues that the contracts are not swaps, fall outside the Commodity Futures Trading Commission’s exclusive jurisdiction and cannot be listed as gaming contracts on derivatives markets under the Commodity Exchange Act. It also contends that Congress did not intend federal commodities law to displace state gambling regulation, and that the CFTC lacks the authority, expertise and resources to oversee gambling.
Better Markets warned that preempting state rules would expose millions of Americans to the harms associated with sports betting, and could threaten election integrity and derivatives markets. It said the Second Circuit could require Kalshi to follow New York gambling law in the same way as other online sportsbooks.
The appeal stems from Kalshi’s effort to block New York’s enforcement action after the state Gaming Commission directed it in October 2025 to stop making an unlicensed mobile sports-wagering platform available in the state. New York alleges that Kalshi offers wagers on sports, elections and cultural events, while Kalshi maintains that federal commodities law governs its event contracts.
The Southern District of New York denied Kalshi’s preliminary-injunction request on July 7, and Kalshi docketed its appeal the following day. The Second Circuit later denied the company interim protection while the appeal proceeds, allowing New York to continue its gambling-law case, as we reported last week.
A separate amicus brief submitted by Ohio, Nevada, 35 other states, the District of Columbia and the Northern Mariana Islands argues that states have traditionally regulated gambling and that federal oversight is not an adequate substitute for state gaming rules.
Better Markets also said the Sixth and Ninth Circuits had recently rejected Kalshi’s claimed exemption from state gambling laws. The Second Circuit appeal originated in the Southern District of New York and was directed to be heard alongside two related appeals on Sept. 3.
