Federally regulated prediction markets have 30 days to lift state-by-state blocks on their contracts or explain why they cannot, the Commodity Futures Trading Commission (CFTC) said on November 5, CDC Gaming reported.
The order lands on Kalshi in the middle of court-ordered restrictions in Nevada, Michigan, Washington and on California tribal lands.
For US players, the practical question is whether sports event contracts stay switched off in states where a judge has said they must be. That is unresolved.
What the CFTC directive requires
This directive is a new interpretation of the requirements for impartial access that apply to designated contract markets (DCMs), the exchanges the CFTC oversees.
Sports Betting Dime reported that DCMs must end domestic geographic restrictions. Otherwise they must send the agency's Division of Market Oversight an explanation of why compliance is not feasible.
Intermediaries that route customers to these markets, such as FanDuel and Fanatics, face the same choice.
CFTC Chairman Michael S. Selig said in a statement quoted by CDC Gaming that "Derivatives markets must operate on a uniform basis at a national scale in order to achieve the purposes set out in the Commodity Exchange Act,".
The agency's interpretation also argues that a trader who opens a position in one state and travels to a restricted one could not manage it or meet margin calls.
The CFTC has said it will weigh the facts of each case. Sports Betting Dime reported that no penalties for non-compliance have been published.
Court orders already in place
On Wednesday, US District Judge Jacqueline Scott Corley of the Northern District of California granted a preliminary injunction.
It blocks Kalshi from offering sports event contracts on the lands of the Blue Lake Rancheria and the Chicken Ranch Rancheria of We-Wuk Indians.
She acted after a Ninth Circuit ruling found the two tribes likely to succeed in arguing the contracts amount to Class III gaming under the Indian Gaming Regulatory Act.
Corley had denied the tribes' earlier request in November 2025.
The order covers contracts on sports including baseball, basketball, football, hockey, soccer, golf, boxing, esports and Ultimate Fighting Championship events.
The tribes were given until Friday to supply maps of their lands. Kalshi must report to the court by November 25 on how it is complying.
The CFTC has previously told Kalshi to disregard court orders in Michigan and New York, according to CDC Gaming. Regulators are pulling in opposite directions.
Operators with licences in the middle
DraftKings, Fanatics and FanDuel have chosen not to list sports event contracts in states where they hold sportsbook licences.
Ohio and Massachusetts have threatened licence loss for companies that offer them. The new interpretation would require those operators to remove such restrictions as well.
Operator pullbacks from single states are not new (see Utah's criminal case against Kalshi).
DraftKings CEO Jason Robins told analysts on an earnings call that courts will eventually settle the legality question, Legal Sports Report reported.
He said he would not make anything of the CFTC's move.
Arkansas files suit as critics object
Arkansas Attorney General Tim Griffin sued KalshiEX LLC and Kalshi Inc. under the state's Deceptive Trade Practices Act.
His office's release says the suit seeks restitution, penalties, taxes and injunctive relief.
Griffin said Kalshi offers self-exclusion tools, deposit limits and trading breaks, features he linked to gambling operators.
The complaint was filed in Independence County Circuit Court, according to CDC Gaming.
California Senator Adam Schiff said on X that the CFTC order undermines state law, tribal sovereignty and the courts. Benjamin Schiffrin, director of securities policy at Better Markets, was blunter.
He said in comments to Legal Sports Report that, unfortunately, CFTC Chair Mike Selig thinks he is above the law.
Four Democratic senators have also asked X why users could not report Polymarket ads through its standard tools, according to CDC Gaming.
Worth keeping an eye on how this lands - there's an ongoing discussion of US online casinos on the forum.
Photo: Legal Sports Report (all rights reserved)