Securities Regulation Daily Wrap Up, FEDERAL PREEMPTION—D. Ariz.: TRO granted; Arizona cannot enforce its gambling laws against Kalshi’s event contracts, (Apr 13, 2026)

By Rebecca E. Hoffman, J.D.

The plaintiffs’ motion for preliminary injunction is still pending.

The District of Arizona, on April 10, granted a temporary restraining order to prevent state officials from enforcing state gambling laws against Kalshi, finding that those laws are likely preempted by the CFTC’s exclusive jurisdiction over swaps (KalshiEX LLC v. Johnson, No. CV-26-01715 (D. Ariz. Apr. 10, 2026)).

In a prior order, the court determined that the Anti-Injunction Act compelled it to deny Kalshi’s request for preliminary relief, but here, the request came from the U.S. and CFTC after they joined Kalshi as plaintiffs, and this effectively flipped the outcome.

The defendants here include the state attorney general and the director of Arizona’s Department of Gaming. The CFTC sought to prevent the defendants from “prosecuting actions related to event contracts listed on CFTC-regulated Designated Contract Markets.”

CFTC’s bailiwick. According to the court, the government demonstrated that it would likely succeed on its claim that the Commodity Exchange Act preempts the state’s gambling prohibitions. Moreover, event contracts fall under the CEA’s definition of swaps, since event contracts are based on the occurrence of future events in the financial, economic, or commercial realm. And under the CEA, the CFTC enjoys the exclusive jurisdiction over the regulation of swaps traded on DCMs. Thus, “Defendants’ enforcement of Arizona’s gambling laws … violates the Supremacy Clause of the United States Constitution,” the court found.

The CFTC also sufficiently argued that it will suffer irreparable harm without the TRO, that the balance of equities favors the CFTC, that a TRO is in the public interest, and that there is no legal remedy available. “Because the CFTC is not a part of the state court criminal proceedings against Kalshi, it cannot protect its exclusive jurisdiction over Kalshi’s DCM.”

"Arizona’s decision to weaponize state criminal law against companies that comply with federal law sets a dangerous precedent," CFTC chair Michael S. Selig said in a press release, "and the court’s order today sends a clear message that intimidation is not an acceptable tactic to circumvent federal law.”

The case is No. CV-26-01715.

Judge: Liburdi, M.

Attorneys: Adam Elliott Lang (Snell & Wilmer L.L.P.) for KalshiEX LLC. Alexander Samuels, Office of the Attorney General, for Jackie Johnson.

Companies: KalshiEX LLC

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