On March 27, New Jersey became the latest state to issue a cease-and-desist order against Kalshi.
Hours before the tip of the Sweet 16, the New Jersey Attorney General’s office served notice to Kalshi that the prediction market allegedly facilitated “unauthorized sports wagers” within state lines. Over the first weekend of the NCAA men’s division I basketball tournament, Kalshi users placed nearly $250 million on event contracts nationwide.
Within the letter, the office made a request to Kalshi urging the company to void all wagers placed by New Jersey residents inside the state. The state’s Division of Gaming Enforcement (DGE) issued the letter. The DGE also sent a cease-and-desist letter to Robinhood, an online brokerage platform that is partnering with Kalshi on March Madness event contracts.
For this year’s NCAA tournament, Newark is hosting the East Regional for the first time since 2011. One regulation in New Jersey prohibits legal sports wagering on college sports events inside the Garden State. Prior to the regional semifinals March 27, Duke star Cooper Flagg admitted that his teammates have received angry messages from gamblers on social media in response to a variety of betting props.
Yet Kalshi still offered in-game event contracts on Alabama-BYU, the first game of that day’s doubleheader. The Crimson Tide led the Cougars 46-38 at the 2:11 mark of the first half. At the time, a contract on Alabama to prevail contained an 84 percent probability on Kalshi. For a user to win $100 on the contract, he needed to place more than $650 on the derivative.
According to the letter from the DGE, Kalshi has until 11:59 p.m. ET March 28 to cease all sports wagering activity “targeting” New Jersey residents. Failure to comply with the directive will prompt the division to take “further enforcement actions,” including any measures available under New Jersey law, DGE Interim Director Mary Jo Flaherty wrote.
