Good morning. Kalshi can’t be subjected to New Jersey gambling law even though it allows sports-related wagers, a federal appeals court said, ruling that the prediction market’s activities fall under federal jurisdiction, Risk Journal’s Richard Vanderford reports. (free link)

• To the CFTC: Kalshi’s so-called event contracts, even those centered on sports, are regulated by the Commodity Futures Trading Commission, the U.S. Court of Appeals for the Third Circuit said Monday in a written decision. CFTC control pre-empts state efforts to regulate Kalshi, the Third Circuit said, affirming a lower-court ruling. Monday’s decision upholds a preliminary injunction against the state.
   
• Reasoning: “Kalshi has shown likelihood of success on its argument that the CFTC’s exclusive jurisdiction over designated contract markets pre-empts New Jersey gambling laws and the state constitution,” the Third Circuit wrote, referring to the legal term of art for platforms such as Kalshi.
   
• Reactions: “This is a big win for the industry and millions of users,” Kalshi Chief Executive Tarek Mansour said in a post on X. “Free markets work. We should keep them that way.” New Jersey Attorney General Jennifer Davenport said the state is evaluating its options in the case.
   
• A bigger fight: The precedent-setting decision adds to the regulatory controversy swirling around prediction markets, which allow wagers in a range of categories, from sports to politics to war. The CFTC under President Trump has moved to normalize the platforms and exercise control over them, even as some states complain that prediction markets’ sports wagers fall under state gambling laws.

NHTSA ends investigation into Tesla’s summon feature.

The National Highway Traffic Safety Administration closed its investigation into Tesla’s “Actually Smart Summon” feature due to the low frequency and severity of reported crashes.

The feature allows owners to use the Tesla app to move their car to their location or a location of their choice. In January 2025, the agency opened an investigation due to reports of crashes occurring while the feature was being used.

Judge throws out Pemex-linked foreign bribery conviction.

A federal judge acquitted a Texas businessman convicted of bribing Mexican oil officials four months after Justice Department prosecutors secured a trial win against him.

U.S. District Judge Kenneth Hoyt confirmed he would dismiss the case and acquit Ramon Alexandro Rovirosa Martinez during a status conference Monday, according to a statement from his lawyers. Judge Hoyt didn’t elaborate on his decision but said he would issue an order this week or early next week, one of Rovirosa’s lawyers, Jim McGrath, told Risk Journal’s Max Fillion. (free link)

• OpenAI released policy proposals for a world with superintelligence—or artificial intelligence that far surpasses human capabilities.
   
• California Attorney General Rob Bonta last week advocated erecting a strict barrier between corporate investors such as private-equity firms and the medical practices they back.

Festival organizer defends Kanye West booking after sponsors flee. 

An executive overseeing a U.K. music festival defended booking Kanye West as the event’s headliner, following criticism from political leaders and high-profile sponsors pulling out.

Melvin Benn, managing director of Festival Republic, said that West has recognized his past “abhorrent” comments about Jews and Adolf Hitler, and has a legal right to perform in the U.K.

U.K. politicians have criticized the booking, with Prime Minister Keir Starmer calling it “deeply concerning.” Sponsors including PepsiCo, Diageo and Anheuser-Busch said they have dropped their sponsorship of the event, scheduled to be held this summer in London’s Finsbury Park.

The next target for the U.S. and Israel is Iran’s economy.

The U.S. and Israel have a set of targets lined up in Iran designed to cripple the country’s economy and ensure the regime’s recovery from this war is long and painful.

Israel is awaiting authorization from Washington this week to begin striking Iran’s energy facilities, an Israeli official said, potentially undermining output in one of the world’s major oil-and-gas producers. In a Wall Street Journal interview, President Trump said Sunday the U.S. was prepared to hit all of Iran’s bridges and power plants, creating enough damage that it would “take 20 years to rebuild, if they’re lucky, if they have a country.”

• Trump Says He’s Calling Iran’s Bluff in Eight-Minute Interview With WSJ
• A Downed Airman, a Mountain Hideout and a High-Risk Rescue in Iran
• Bank of Japan Warns Iran War Could Depress Economy
• Jamie Dimon Warns of Higher Inflation, Interest Rates From Iran War

• Truckers are parking vehicles and driving fewer miles as skyrocketing diesel prices push up operating costs, according to a new survey. About 18% of more than 540 trucking companies surveyed last month by DAT Freight & Analytics said they had parked trucks due to the surge in fuel prices because of the Iran war. About 45% said they were driving fewer miles, while 44% said they were avoiding particularly heavy loads that eat up fuel, Liz Young reports for Risk Journal. (free link)
   
• Technology company Plex took its 120 employees to Honduras for a weeklong bonding experience. It was a disaster from the moment they arrived. 
   
• The oil shock set off by the war in Iran is already rippling through Asia, where factories are curbing production to save energy and some gas stations are telling drivers they can fill up only partway. Economists say it is a sign of things to come for countries in Europe and Africa that also rely on imports from the Middle East.
   
• As the AI-generated imagery and video colloquially called slop spreads across social media and video feeds, marketers are going out of their way to tell consumers they’re not to blame.

• The Artemis astronauts have gone the distance—the longest in human history, in fact.
   
• Bill Ackman’s Pershing Square Capital said it had made an offer to buy Universal Music Group in a deal that values the company at around $60 billion, the latest attempt by the activist investor to land the world’s largest record label.
   
• Paramount has received signed equity commitments of close to $24 billion from three sovereign-wealth funds led by Saudi Arabia to help back its takeover of Warner Bros. Discovery, according to people familiar with the matter.
   
• The Trump administration will raise payments to Medicare insurers by 2.48% next year, a significant improvement for the health-insurance industry after an earlier proposal torpedoed shares of the largest companies.

Follow us on X at @WSJRisk. Send tips to our reporters Max Fillion at max.fillion@dowjones.com, Mengqi Sun at mengqi.sun@wsj.com and Richard Vanderford at richard.vanderford@wsj.com.

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