Super Bowl LX kicks off in Santa Clara tonight at 6:30 p.m. ET, and while the state still doesn’t allow a single legal sports bet, millions of Californians are placing trades on the Seahawks and Patriots anyway — through Kalshi.
The platform holds a Designated Contract Market (DCM) license from the Commodity Futures Trading Commission, which grants it federal authority to list event contracts nationwide. And that federal jurisdiction is the reason Kalshi is serving California residents despite the state’s prohibition on traditional sportsbooks and online sports wagering.
Kalshi is not alone. As of this week, at least 12 prediction market apps offer Super Bowl trading to California residents — including Robinhood, Coinbase, and Crypto.com’s new standalone app OG, which launched days ago with its own full CFTC-regulated stack.
Kalshi is using the Super Bowl as an acquisition event, offering $10 in free trading credit to new users who sign up with code DEFI and place their first trade.
| Platform | Sign-up bonus | Promo code | How to claim | |
|---|---|---|---|---|
★ Best deal
Kalshi | $10 | DEFI | Best deal so far. Complete $10 in trades within 90 days. Claim here | Claim Now |
How Kalshi operates legally in California
The distinction that keeps Kalshi legal in California comes down to regulatory classification. Traditional sportsbooks like DraftKings and FanDuel require state-level gambling licenses to operate. California has never issued those licenses, and its tribal gaming compacts don’t extend to digital sports wagering. Kalshi sidesteps that entire framework.
Under the Commodity Exchange Act, the CFTC holds exclusive jurisdiction over designated contract markets. Kalshi’s products are structured as binary event contracts — financial instruments where traders buy and sell positions on yes-or-no outcomes — rather than wagers placed against a house. Each contract trades on an open order book between users, settling at $1.00 if the outcome occurs and $0.00 if it doesn’t. There are no odds set by the platform, no vigorish, and no parlays in the traditional sense.
This structure places Kalshi’s offerings under the same regulatory umbrella as commodity futures and derivatives, not under the jurisdiction of state gaming commissions. That framework has been tested repeatedly in court, and so far, federal judges have generally sided with the exchange.
California tribes challenged Kalshi — and lost the first round
The most direct legal threat to Kalshi’s California operations came 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 event contracts constitute Class III gaming under the Indian Gaming Regulatory Act (IGRA) and that the platform was conducting unauthorized gambling on tribal lands.
The tribes argued that Kalshi’s contracts divert revenue from tribal casinos, undermine IGRA’s purpose of supporting tribal economic sovereignty, and expose users to unregulated gambling without consumer protections. They also took aim at Kalshi’s advertising, citing campaigns that marketed the platform as offering legal sports betting in all 50 states.
In November 2025, Judge Jacqueline Corley denied the tribes’ motion for a preliminary injunction. The ruling found that the tribes had not demonstrated a likelihood of success on the merits. On the central IGRA question, the court determined that the Unlawful Internet Gambling Enforcement Act (UIGEA) and the Commodity Exchange Act — not IGRA — govern Kalshi’s event contracts. UIGEA specifically excludes transactions conducted on exchanges registered under the Commodity Exchange Act from its definition of illegal gambling. The court also found that only the CFTC has the authority to determine whether an event contract violates the Commodity Exchange Act, meaning individual courts and state regulators cannot unilaterally block these products.
Corley acknowledged the seriousness of the tribes’ concerns in her closing remarks, noting that Kalshi may have found a path around gambling prohibitions originally created to protect tribal interests. But she concluded that the law, as currently structured, does not give the tribes the legal footing they need. A hearing on Kalshi’s motion to dismiss the case entirely is scheduled for March 19, 2026.
The CFTC’s current posture favors Kalshi
The federal regulatory environment has shifted in Kalshi’s direction. CFTC Chairman Michael Selig withdrew a proposed 2024 rule that would have banned sports and political event contracts, and rescinded a 2025 staff advisory that had cautioned registrants about offering sports-related contracts during ongoing litigation. At the same time, Selig announced plans to draft new event contract rules and declared the CFTC would actively defend its exclusive jurisdiction over commodity derivatives in pending court cases. The net effect is a regulator that is permissive toward prediction markets while asserting federal authority over them — a posture that has drawn sharp criticism from tribal leaders and state attorneys general.
California’s attorney general filed a legal brief supporting the tribes’ lawsuit, and the California Nations Indian Gaming Association publicly criticized Selig for acting as a corporate advocate rather than a regulator.
A recent NBC News investigation highlighted how prediction markets are exploiting this regulatory gap ahead of the Super Bowl, with New York Attorney General Letitia James issuing a consumer warning that these platforms lack the same consumer protections as regulated gambling operators.
Still, the current regulatory stance means Kalshi faces no imminent federal obstacle to its California operations. The case could eventually reach the 9th Circuit Court of Appeals on the question of federal preemption, which would set binding precedent for California and the western states. Separately, 34 state attorneys general have filed a brief supporting New Jersey’s court case against Kalshi, signaling broad state-level opposition that could influence how federal courts weigh these questions.
Super Bowl LX brings the tension into focus
The timing of Super Bowl LX couldn’t sharpen this debate more effectively. The game takes place at Levi’s Stadium in Santa Clara tonight, inside a state that has repeatedly voted against legal sports betting — yet Kalshi’s Super Bowl champion market alone has generated over $240 million in trading volume this season.
The Seahawks are trading at roughly 68 cents on the dollar across Kalshi and Polymarket, implying a 68% probability of winning. The Patriots sit around 32 cents, pricing in a substantial underdog scenario. Beyond the game outcome, Kalshi lists contracts on the spread, MVP, national anthem duration, halftime show details, Gatorade color, commercial advertisers, celebrity attendees, and broadcaster mentions.
Kalshi’s total Super Bowl trading volume across all market types exceeds $240 million, a roughly five-fold increase from Super Bowl LIX. The NFL has pushed back on prediction markets by banning Kalshi and Polymarket from purchasing ad time during the broadcast.
For Californians specifically, Kalshi and its competitors represent the only way to put real money on the game without crossing state lines or using an offshore book. Traditional sportsbooks remain geofenced out of California, and no in-state alternative exists.
What Kalshi is — and what it isn’t
Understanding why Kalshi is legal in California requires understanding what the platform actually does. On a sportsbook, you place a bet against the house at odds the operator sets, and the house profits from the margin built into those odds. On Kalshi, you buy or sell contracts on an exchange where every position has a counterparty. The platform earns revenue through transaction fees, not from the outcome of events.
This peer-to-peer structure is functionally closer to a stock exchange than a casino. Prices reflect aggregate market sentiment rather than a bookmaker’s risk assessment. You can exit a position before the event resolves by selling your contracts to another trader, which is something no traditional sportsbook allows. Cash and positions on Kalshi also earn 3.25% APY, reinforcing the platform’s identity as a financial product rather than a gambling app.
None of this means the legal picture is settled. Multiple states have issued cease-and-desist orders, tribal nations across the country are filing lawsuits in several jurisdictions, and a coalition of state attorneys general is actively working to challenge federal preemption. A 9th Circuit appeal on the California case alone could reshape the landscape across the western states.
The bottom line for California residents
Kalshi is legal and operational in California today. Its federal DCM status places it outside the jurisdiction of state gambling regulators, and the only direct legal challenge brought in California courts has failed at the preliminary injunction stage. California residents 18 or older can open accounts, complete identity verification, and trade event contracts on sports, politics, economics, entertainment, and weather.
Whether that remains the case beyond 2026 depends on how federal courts rule on preemption, whether the CFTC changes its regulatory posture, and whether Congress decides to act. For now, as Super Bowl LX kicks off in Santa Clara tonight, Kalshi sits in a legal gray zone that federal regulators have effectively colored green.
