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A bipartisan coalition of 40 states and Washington, D.C., along with the NFL, is backing New Jersey’s push for Supreme Court review in a closely watched fight over sports prediction markets.
At issue is whether contracts offered on platforms such as Kalshi are federally regulated financial products under commodities law or sports wagers that must follow state gambling rules. The dispute matters because it could determine whether state regulators, including those in New York, can apply gambling safeguards such as licensing, age limits, and other consumer protections to these products.
States and the NFL press for Supreme Court intervention
According to the states’ filing, lower courts are “hopelessly confused and divided” on whether the Commodity Exchange Act overrides state sports-gambling laws. Newsweek reported that Ohio led the states’ brief, while New Jersey asked the Supreme Court to resolve the split after losing at the Third Circuit.
The legal divide is significant. The Third Circuit sided with Kalshi in its dispute with New Jersey, while the Ninth Circuit sided with Nevada regulators. The Sixth Circuit also ruled against Kalshi in litigation involving Ohio and Tennessee.
The NFL filed its own brief supporting Supreme Court review on Thursday. The league argued that sports prediction contracts are, in substance, gambling, and said state gaming regulators are better positioned to police them. In its filing, the NFL said, “In the end, we believe that given the current resource constraints of the CFTC, this is a job better left to the states.”
Why the case matters for players and regulators
The states said gambling laws can require protections including licensing, exclusion lists, minimum-age rules, and spending limits. The NFL separately raised integrity concerns around contracts tied to events that could potentially be influenced or known in advance by insiders, including a kicker missing a field goal, a player injury, an officiating decision, or whether the first play is a run or pass.
The league also noted the scale of the market, saying $1.8 billion of the $3.3 billion traded on prediction markets on the first Sunday of the NFL season involved football-related contracts. It has pushed for a minimum age of 21 for sports prediction trading, while Kalshi currently permits customers age 18.
Kalshi argues that its event contracts are financial products traded on a federally regulated exchange and that federal commodities law gives the CFTC exclusive jurisdiction. Prediction-market companies have also argued that a single federal framework is preferable to navigating separate state gambling regimes.
What comes next
The Supreme Court has not agreed to hear the case. Kalshi’s response to New Jersey’s petition is due Nov. 9.
For New York readers, the immediate takeaway is procedural, not operational: no new state rule was announced this week. But if the Supreme Court takes the case, the eventual decision could help define whether sports prediction markets are governed mainly by federal commodities regulators or by state gambling law.
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Source: As reported by newsweek.com.
