New Jersey has asked the Supreme Court to decide whether prediction-market platforms such as Kalshi can offer sports-related event contracts without following state gambling laws. The petition says the companies are operating without required state licences and asks the justices to settle whether state regulators or the Commodity Futures Trading Commission control the products.
As reported in July, Justice Samuel Alito gave New Jersey until Aug. 4 to seek review after the Third Circuit sided with Kalshi. In April, the Philadelphia-based court ruled 2-1 that the Commodity Exchange Act likely pre-empted New Jersey’s gaming laws, while Kalshi says its sports wagers are swaps that only the CFTC can regulate.
The filing came days after the Ninth Circuit reached the opposite conclusion in a Nevada case. On Aug. 28, the panel said Kalshi’s sports event contracts were sports bets, not swaps, and that federal law likely does not block Nevada’s gaming rules. It also affirmed dissolving an injunction against Kalshi on those contracts and sent a separate election-contract issue back to the district court.
New Jersey says the split makes Supreme Court review necessary. Attorney General Jennifer Davenport said companies like Kalshi have no right to offer sports bets without following state law, and state officials argue the rules are meant to protect minors, curb problem gambling, prevent insider trading and ensure operators can pay winners.
NJ.com said this is the first time the Supreme Court has been asked to review the prediction-market business model. The report said litigation over the issue has spread across at least 20 states, with dozens of active suits pending and several state gambling laws blocked by federal courts.
NJ.com said 44 states, hundreds of tribes and casinos have weighed in against prediction markets’ arguments, and that New Jersey co-led a Ninth Circuit amicus brief joined by 39 other jurisdictions. Recent congressional research says prediction markets have expanded from economics and weather into politics and sports, and that sports contracts became common on CFTC-registered exchanges in early 2025 after the agency adopted a more permissive stance. The report said sports betting generated $16.89 billion for states nationwide in 2025, excluding tribal casinos, and that Kalshi derived 95% of its revenue that year from sports betting.
