A coalition of 39 states and Washington, D.C., has asked the U.S. Supreme Court to hear New Jersey’s challenge to Kalshi, widening support for a case that could determine whether states can enforce sports-betting laws against prediction-market contracts.
The amicus brief, led by Ohio Attorney General D. Andrew Wilson, argues that federal and state courts are divided over whether the Commodity Exchange Act displaces state sports-gambling laws. The states say the conflict has left their authority uncertain and requires a nationwide ruling.
New Jersey’s petition asks whether the 2010 Dodd-Frank Act preempted state regulation of sports bets placed within their borders when the contracts are offered through markets registered with the Commodity Futures Trading Commission. Petitioners include Mary Jo Flaherty, interim director of the New Jersey Division of Gaming Enforcement, and Attorney General Jennifer Davenport; KalshiEX LLC is the respondent.
The dispute follows an April 6 ruling in which a divided Third Circuit panel found federal law likely preempted New Jersey’s sports-betting rules as applied to Kalshi’s sports-event contracts. The Ninth Circuit reached the opposite conclusion on Aug. 28, holding that sports bets on sporting-event outcomes do not fall within the CFTC’s exclusive jurisdiction. The Sixth Circuit subsequently followed that approach in a case involving Ohio and Tennessee, according to RG.org.
The states’ brief says the courts are “hopelessly confused and divided” over an issue with broad consequences for state gambling regimes. It argues that those systems protect minors, provide self-exclusion mechanisms, impose consumer and integrity safeguards, and can limit gambling spending.
New Jersey has maintained that prediction markets cannot offer sports wagers in the state without complying with the rules governing licensed gambling operators. Its petition says the litigation has spread to at least 20 states and created a direct split between the Third and Ninth Circuits. Related cases remain pending in five other federal appeals courts and before the Massachusetts Supreme Judicial Court.
The filing follows the American Gaming Association’s separate call for Supreme Court review, as we reported Oct. 8. Gaming-regulator groups, including the International Association of Gaming Regulators and the North American Gaming Regulators Association, filed their own supporting brief on Oct. 2, saying conflicting appellate decisions had left them unsure whether they could require licensing and enforce consumer protections.
The states also contend that the CFTC, under new leadership, has backed the prediction-market position, sued at least nine states over sports-betting laws and proposed allowing sports contracts on federally regulated exchanges. Forty-four states submitted comments opposing that proposed rule, the coalition said.
Kalshi received a 30-day extension to respond to New Jersey’s petition, making its response due Nov. 9.
