The New Jersey Division of Gaming Enforcement (DGE) has filed an appeal with the Third Circuit in response to Kalshi’s successful bid for a preliminary injunction last month.

The DGE issued a cease-and-desist letter to Kalshi in March, demanding it remove its sports predictions markets from the Garden State. Kalshi sued in response. The DGE has come up with a solid argument in its case to ban Kalshi from operating in the Garden State. However, Kalshi believes that federal law supersedes state law.

By awarding the preliminary injunction, the District Court has allowed Kalshi to continue operating in New Jersey and signaled that is likely to win the case. The company has recently offered sports contracts as part of its real-world events markets.