Is Kalshi legal in California? What to know ahead of Super Bowl LX

Super Bowl LX kicks off in Santa Clara tonight at 6:30 p.m. ET, and whereas the state nonetheless doesn’t enable a single legal sports activities guess, thousands and thousands of Californians are inserting trades on the Seahawks and Patriots anyway — by means of Kalshi.

The platform holds a Designated Contract Market (DCM) license from the Commodity Futures Trading Commission, which grants it federal authority to record occasion contracts nationwide. And that federal jurisdiction is the rationale Kalshi is serving California residents regardless of the state’s prohibition on conventional sportsbooks and on-line sports activities wagering.

Kalshi isn’t alone. As of this week, not less than 12 prediction market apps supply Super Bowl buying and selling to California residents — together with Robinhood, Coinbase, and Crypto.com’s new standalone app OG, which launched days in the past with its personal full CFTC-regulated stack.

Kalshi is utilizing the Super Bowl as an acquisition occasion, providing $10 in free buying and selling credit score to new customers who enroll with code DEFI and place their first commerce.

How Kalshi operates legally in California

The distinction that retains Kalshi legal in California comes down to regulatory classification. Traditional sportsbooks like DraftKings and FanDuel require state-level playing licenses to function. California has by no means issued these licenses, and its tribal gaming compacts don’t lengthen to digital sports activities wagering. Kalshi sidesteps that total framework.

Under the Commodity Exchange Act, the CFTC holds unique jurisdiction over designated contract markets. Kalshi’s merchandise are structured as binary occasion contracts — monetary devices the place merchants purchase and promote positions on yes-or-no outcomes — reasonably than wagers positioned in opposition to a home. Each contract trades on an open order ebook between customers, settling at $1.00 if the end result happens and $0.00 if it doesn’t. There aren’t any odds set by the platform, no vigorish, and no parlays in the normal sense.

This construction locations Kalshi’s choices beneath the identical regulatory umbrella as commodity futures and derivatives, not beneath the jurisdiction of state gaming commissions. That framework has been examined repeatedly in court docket, and to this point, federal judges have typically sided with the alternate.

California tribes challenged Kalshi — and misplaced the primary spherical

The most direct legal menace to Kalshi’s California operations got here from three tribal nations: Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians. In July 2025, the tribes sued Kalshi and Robinhood in the Northern District of California, alleging that sports activities occasion contracts represent Class III gaming beneath the Indian Gaming Regulatory Act (IGRA) and that the platform was conducting unauthorized playing on tribal lands.

The tribes argued that Kalshi’s contracts divert income from tribal casinos, undermine IGRA’s objective of supporting tribal financial sovereignty, and expose customers to unregulated playing with out shopper protections. They additionally took goal at Kalshi’s promoting, citing campaigns that marketed the platform as providing legal sports activities betting in all 50 states.

In November 2025, Judge Jacqueline Corley denied the tribes’ motion for a preliminary injunction. The ruling discovered that the tribes had not demonstrated a chance of success on the deserves. On the central IGRA query, the court docket decided that the Unlawful Internet Gambling Enforcement Act (UIGEA) and the Commodity Exchange Act — not IGRA — govern Kalshi’s occasion contracts. UIGEA particularly excludes transactions carried out on exchanges registered beneath the Commodity Exchange Act from its definition of unlawful playing. The court docket additionally discovered that solely the CFTC has the authority to decide whether or not an occasion contract violates the Commodity Exchange Act, that means particular person courts and state regulators can’t unilaterally block these merchandise.

Corley acknowledged the seriousness of the tribes’ considerations in her closing remarks, noting that Kalshi could have discovered a path round playing prohibitions initially created to defend tribal pursuits. But she concluded that the legislation, as presently structured, doesn’t give the tribes the legal footing they want. A listening to on Kalshi’s movement to dismiss the case fully is scheduled for March 19, 2026.

The CFTC’s present posture favors Kalshi

The federal regulatory atmosphere has shifted in Kalshi’s route. CFTC Chairman Michael Selig withdrew a proposed 2024 rule that may have banned sports activities and political occasion contracts, and rescinded a 2025 workers advisory that had cautioned registrants about providing sports-related contracts throughout ongoing litigation. At the identical time, Selig introduced plans to draft new occasion contract guidelines and declared the CFTC would actively defend its unique jurisdiction over commodity derivatives in pending court docket instances. The internet impact is a regulator that’s permissive towards prediction markets whereas asserting federal authority over them — a posture that has drawn sharp criticism from tribal leaders and state attorneys basic.

California’s legal professional basic filed a legal transient supporting the tribes’ lawsuit, and the California Nations Indian Gaming Association publicly criticized Selig for performing as a company advocate reasonably than a regulator.

A current NBC News investigation highlighted how prediction markets are exploiting this regulatory hole ahead of the Super Bowl, with New York Attorney General Letitia James issuing a shopper warning that these platforms lack the identical shopper protections as regulated playing operators.

Still, the present regulatory stance means Kalshi faces no imminent federal impediment to its California operations. The case might finally attain the ninth Circuit Court of Appeals on the query of federal preemption, which might set binding precedent for California and the western states. Separately, 34 state attorneys basic have filed a quick supporting New Jersey’s court docket case in opposition to Kalshi, signaling broad state-level opposition that would affect how federal courts weigh these questions.

Super Bowl LX brings the strain into focus

The timing of Super Bowl LX couldn’t sharpen this debate extra successfully. The recreation takes place at Levi’s Stadium in Santa Clara tonight, inside a state that has repeatedly voted in opposition to legal sports activities betting — but Kalshi’s Super Bowl champion market alone has generated over $240 million in trading volume this season.

The Seahawks are buying and selling at roughly 68 cents on the greenback throughout Kalshi and Polymarket, implying a 68% likelihood of successful. The Patriots sit round 32 cents, pricing in a considerable underdog state of affairs. Beyond the sport end result, Kalshi lists contracts on the unfold, MVP, nationwide anthem period, halftime present particulars, Gatorade colour, industrial advertisers, superstar attendees, and broadcaster mentions.

Kalshi’s complete Super Bowl buying and selling quantity throughout all market sorts exceeds $240 million, a roughly five-fold enhance from Super Bowl LIX. The NFL has pushed again on prediction markets by banning Kalshi and Polymarket from purchasing ad time throughout the broadcast.

For Californians particularly, Kalshi and its opponents characterize the one means to put actual cash on the sport with out crossing state strains or utilizing an offshore ebook. Traditional sportsbooks stay geofenced out of California, and no in-state various exists.

What Kalshi is — and what it isn’t

Understanding why Kalshi is legal in California requires understanding what the platform truly does. On a sportsbook, you place a guess in opposition to the home at odds the operator units, and the home income from the margin constructed into these odds. On Kalshi, you purchase or promote contracts on an alternate the place each place has a counterparty. The platform earns income by means of transaction charges, not from the end result of occasions.

This peer-to-peer construction is functionally nearer to a inventory alternate than a on line casino. Prices replicate combination market sentiment reasonably than a bookmaker’s danger evaluation. You can exit a place earlier than the occasion resolves by promoting your contracts to one other dealer, which is one thing no conventional sportsbook permits. Cash and positions on Kalshi additionally earn 3.25% APY, reinforcing the platform’s id as a monetary product reasonably than a playing app.

None of this implies the legal image is settled. Multiple states have issued cease-and-desist orders, tribal nations throughout the nation are filing lawsuits in several jurisdictions, and a coalition of state attorneys basic is actively working to problem federal preemption. A ninth Circuit enchantment on the California case alone might reshape the panorama throughout the western states.

The backside line for California residents

Kalshi is legal and operational in California at this time. Its federal DCM standing locations it exterior the jurisdiction of state playing regulators, and the one direct legal problem introduced in California courts has failed on the preliminary injunction stage. California residents 18 or older can open accounts, full id verification, and commerce occasion contracts on sports activities, politics, economics, leisure, and climate.

Whether that continues to be the case past 2026 relies on how federal courts rule on preemption, whether or not the CFTC modifications its regulatory posture, and whether or not Congress decides to act. For now, as Super Bowl LX kicks off in Santa Clara tonight, Kalshi sits in a legal grey zone that federal regulators have successfully coloured inexperienced.

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