The International Association of Gaming Regulators and the North American Gaming Regulators Association have filed a joint amicus brief urging the U.S. Supreme Court to hear New Jersey’s challenge to Kalshi’s sports-event contracts.
The groups backed New Jersey’s position that the court must decide whether the Commodity Exchange Act, as amended by the 2010 Dodd-Frank Act, displaces state gambling laws when sports wagers are offered through an exchange registered with the Commodity Futures Trading Commission.
According to Focus Gaming News, the regulators argued that the appellate split has already left state authorities and licensed gambling businesses uncertain about which rules govern the same contracts in different jurisdictions. The brief said the question reaches beyond a single state’s statute or regulatory system.
As reported in September, New Jersey’s own petition asks the Supreme Court to resolve whether federally registered prediction markets can offer sports wagers without complying with state sports-betting law.
The Third Circuit ruled 2-1 for Kalshi in April, affirming an injunction that prevented New Jersey from enforcing its sports-gambling laws against the company’s contracts. New Jersey’s petition described that outcome as directly and irreconcilably conflicting with the Ninth Circuit’s position.
On Aug. 28, the Ninth Circuit held that Kalshi’s sports-event contracts were not swaps under the Commodity Exchange Act because they were sports bets rather than contracts tied to a financial, economic or commercial consequence. The court also held that Kalshi had not shown that federal commodities law pre-empted Nevada’s gaming rules and affirmed in part the dissolution of an injunction against Nevada enforcement.
IAGR and NAGRA also pointed to decisions in the Sixth and Ninth Circuits that, in their view, found Kalshi had not established that its contracts were swaps or that federal law barred gambling-law enforcement in New Jersey, Ohio or Tennessee. The result, they argued, is that a contract can be treated differently depending on the state in which it is offered.
The associations identified age restrictions, self-exclusion requirements, approved betting events, integrity monitoring and responsible-gambling measures as state protections potentially affected by the dispute. The Ohio Casino Control Commission has said Kalshi made sports contracts available to customers aged 18 to 20, used a self-exclusion programme that did not meet Ohio requirements and offered bets on events the state had not approved.
The filing also highlighted tribal gaming concerns. Under the Indian Gaming Regulatory Act, sports betting on tribal land is generally Class III gaming governed through tribal-state compacts. The regulators noted that Maine reserves mobile sports-wagering licences for federally recognised tribes, Michigan excludes internet sports betting conducted exclusively on Indian lands from its state framework, and Nevada has warned licensees that violations of compact-based tribal rights could bring discipline.
The Ninth Circuit’s ruling in Blue Lake Rancheria v. Kalshi found that Kalshi’s sports contracts could constitute Class III gaming for federal tribal-gaming purposes. IAGR and NAGRA said that conclusion illustrates why the Supreme Court’s pre-emption decision could affect tribal-state regulatory arrangements as well as conventional state licensing systems.
New Jersey has said prediction-market sports-wager litigation has reached at least 20 states. Its petition identified Jennifer Davenport and New Jersey gaming-enforcement official Mary Jo Flaherty as petitioners against KalshiEX, LLC.
