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New Jersey has asked the U.S. Supreme Court to decide whether states can regulate sports-related prediction markets offered by Kalshi and similar platforms.
The filing asks the justices to overturn an April ruling from the 3rd U.S. Circuit Court of Appeals, which found that the Commodity Futures Trading Commission likely has exclusive jurisdiction over Kalshi’s sports-related event contracts. The dispute has become one of the most closely watched legal fights over where prediction markets end and state-regulated sports betting begins.
New Jersey challenges 3rd Circuit ruling favoring Kalshi
According to Reuters, New Jersey says companies such as Kalshi should not be able to offer what the state views as sports bets without complying with state gaming laws and licensing rules.
New Jersey Attorney General Jennifer Davenport said, “These companies have no right to offer their sports bets without following state law, which is why dozens of states across the ideological spectrum have opposed them.”
In its Supreme Court filing, New Jersey argued that federal law is not clear enough to shift control of a “multi-billion-dollar sportsgaming industry” to a federal agency that does not specialize in gambling regulation.
Kalshi did not immediately respond to Reuters’ request for comment.
Conflicting court rulings raise stakes for regulators
The Supreme Court request comes after a split in the federal courts.
The 3rd Circuit’s 2-1 decision in April backed Kalshi’s position that the CFTC oversees its sports event contracts. But Reuters reported that a separate federal appeals court recently ruled that Nevada regulators could require Kalshi to hold a gaming license.
That conflict increases the chances that the Supreme Court could step in to settle the issue nationally. Reuters also reported that at least four states have won court orders restricting Kalshi’s activities.
The broader fight matters because states argue these markets can resemble sports betting while operating outside the state licensing, consumer-protection, and age-limit rules applied to traditional sportsbooks.
What comes next
The immediate next step is whether the U.S. Supreme Court agrees to hear New Jersey’s appeal.
If the justices take the case, the outcome could help determine whether oversight of sports-related event contracts stays primarily with the CFTC or whether states retain broader authority to enforce their own gaming laws against platforms such as Kalshi.
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Source: As reported by Nate Raymond.
