Better Markets has filed an amicus brief urging the U.S. Court of Appeals for the Tenth Circuit to preserve Utah’s power to prohibit Kalshi’s sports-event contracts within the state. The nonprofit asked the court to affirm a Utah federal judge’s ruling for state officials in KalshiEX LLC v. Cox, case No. 26-4100.
The brief frames the appeal as a dispute over whether a product’s label can override its substance. “Calling a sports bet a ‘swap’ doesn’t make it one,” Dominick Freda of Better Markets said in announcing the filing Oct. 29. The group argues that Kalshi’s sports contracts are gambling rather than financial instruments and are therefore outside the Commodity Futures Trading Commission’s exclusive jurisdiction.
Better Markets contends that the Commodity Exchange Act bars gaming contracts from being listed on derivatives markets, and that the CFTC’s own historical treatment of such products supports that interpretation. Its brief also says the act’s savings clauses preserve state jurisdiction, while Congress did not intend the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act to silently legalize sports betting nationwide or displace state gambling laws.
The group warned that federal pre-emption of state restrictions would expose millions of people to the harms associated with sports betting. It said its interest in the case includes protecting consumers from bets marketed as legitimate financial instruments, preserving state authority over gambling harms and directing the CFTC’s limited resources toward derivatives markets.
Utah has prohibited all forms of gambling for more than a century, according to Better Markets. State law bars bets on whether events will occur in contests or games, while Kalshi’s contracts can pay customers according to outcomes such as a game winner, a player scoring during part of a game or other sporting results.
The appeal follows a Utah district court decision granting summary judgment to state officials and rejecting Kalshi’s claim that the Commodity Exchange Act pre-empted Utah’s anti-gambling law. The court held that the statute’s savings clause preserved state jurisdiction and that its wider framework left room for Utah to supplement federal regulation. It also rejected Kalshi’s argument that Utah’s law conflicted with federal rules requiring designated contract markets to provide impartial access, finding that requirement concerned discrimination based on monetary resources.
The district court said it was implausible that Congress had silently legalized sports betting nationwide through Dodd-Frank. Utah Attorney General Derek Brown similarly argued after the ruling that “You can’t rebrand illegal gambling as a federal commodity.”
The Tenth Circuit is considering the case amid conflicting appellate rulings on sports-related event contracts. The Ninth Circuit had already backed Nevada’s ability to enforce its gambling laws against Kalshi’s sports products, as we reported in August. A Sept. 25 Sixth Circuit decision likewise found the contracts were not swaps and that state regulation would not be pre-empted, while the Third Circuit has held that the CFTC’s exclusive jurisdiction over swaps can pre-empt state law.
Better Markets, founded after the 2008 financial crisis to advocate financial-market reform, said it has submitted more than 130 CFTC comment letters, including on the definition of a swap. Its filing asks the Tenth Circuit to join the Sixth and Ninth Circuits’ approach and uphold Utah’s authority over sports betting within its borders.
