California and 37 state attorneys general filed a brief in a federal appeals court arguing that states have the right to enforce their own gambling laws against Kalshi, a prediction market operator.
The brief was filed in the case KalshiEX LLC v. Cox, pending in the U.S. Court of Appeals for the Tenth Circuit. Kalshi is appealing to overturn Utah's state constitutional prohibition on sports wagering as applied to sports event contracts traded on prediction markets.
The coalition argues that federal preemption of state gambling laws as applied to prediction market providers is improper and would undermine states' traditional role in regulating gambling and protecting citizens. Kalshi contends that the federal Commodities Exchange Act preempts Utah's state restrictions.
According to California Attorney General Rob Bonta, the filing is necessary to ensure "that federal commodities laws are not weaponized to evade state laws, fuel gambling addiction, and undermine state regulation of legal gaming."
This marks the ninth time California has joined multistate efforts targeting Kalshi and similar prediction market companies. Similar briefs have been filed in other federal circuit courts and in support of New Jersey's petition to the U.S. Supreme Court.