TLDR New Jersey filed a Supreme Court petition on Sept. 2 over Kalshi’s sports event contracts The state wants justices to resolve a split between the Third and Ninth Circuit Courts New Jersey argues Kalshi’s legal theory could put traditional sportsbooks and casinos at risk Kalshi says it operates as a nationwide exchange that cannot follow 50 different state rules Courts have ruled 34 times in favor of states and 6 times in favor of prediction markets
New Jersey has asked the U.S. Supreme Court to decide whether prediction markets can offer sports event contracts without following state gambling laws.
The state filed its petition on Sept. 2. It wants the Court to answer whether the 2010 Dodd-Frank Act blocks states from regulating sports bets offered through markets registered with the Commodity Futures Trading Commission.
The request follows a split between two federal appeals courts. The Third Circuit ruled in April that Kalshi’s sports contracts count as swaps under federal law. That ruling said federal commodities law overrides New Jersey’s gambling rules.
Last week, the Ninth Circuit reached the opposite result in a separate case involving Nevada. That court said Kalshi’s sports contracts are not swaps, so Nevada’s gambling laws still apply.
New Jersey called the disagreement a “direct, acknowledged, and irreconcilable split.” The state argues the Supreme Court now needs to step in.
New Jersey Attorney General Jennifer Davenport wrote that companies like Kalshi claim to offer legal sports betting nationwide but refuse to follow any state’s gambling laws. She said the state wants the Court to confirm that Congress did not exempt sports betting from state oversight.
What New Jersey Says Is at Stake
New Jersey argues Kalshi’s legal theory could reach far past prediction markets.
The Third Circuit found that Kalshi’s contracts fit the